Minera Escondida
| Company type | Private |
|---|---|
| Industry | Mining |
| Founded | 1988 |
| Headquarters | Antofagasta , Chile |
Area served | Worldwide |
| Products | Copper, gold, silver |
| Owner | BHP (57.5%), Rio Tinto (30%), JECO Corp (12.5%) |
Number of employees | 2,951 (direct employees) (2006) |
Minera Escondida manages the Escondida copper mine, which comprises two open pit operations located in Chile's Atacama Desert, approximately 170 kilometers southeast of Antofagasta. It stands as the top copper-producing mine worldwide. In 2007, its output reached 1.483 million tons of copper, valued at US$10.12 billion, accounting for 9.5% of the global copper production and 26% of Chile's total.
Overview
The name 'Escondida', meaning 'hidden' in Spanish, reflects the fact that its principal orebody lies beneath hundreds of meters of barren material. The main open pit is visible in satellite imagery, with adjacent pits operated by Barrick Gold. The secondary Escondida pit, known as Escondida Norte, is situated to the east of the Zaldívar pit.
Escondida primarily produces copper concentrates, which are transported as slurry to Coloso port for dewatering and export. Additionally, a smaller quantity of cathode copper is produced through leaching of oxide and low-grade sulfide ores. The mine also yields byproducts including gold and silver.
Ownership is split among BHP holding 57.5%, Rio Tinto with 30%, and JECO Corp, a Japanese consortium established in 1988 composed of Mitsubishi (70%), Nippon Mining & Metals (20%), and Mitsubishi Materials (10%). In 2010, JECO increased its share by 2.5% via JECO 2 Ltd. The mine’s governance is overseen by a seven-member Owners' Council representing these partners. Escondida possesses the largest confirmed copper reserves globally and represents Chile's most significant foreign investment.
By 2006, total investment in the project had reached US$5.64 billion. As of June 2013, Escondida contributed roughly 5% to worldwide copper production.
History
In 1978, J David Lowell proposed an exploration initiative targeting the porphyry copper belt between Chuquicamata and El Salvador. This effort was undertaken through a joint venture between Minera Utah de Chile and Getty Mining. On March 14, 1981, the final planned borehole, 'Pozo 6', uncovered the main Escondida orebody at a depth of 240 meters, revealing 52 meters grading 1.51% copper. Subsequent drilling defined the extent of the deposit, and a shaft was constructed to obtain bulk samples. Mine development commenced in 1988, involving removal of over 180 million tonnes of waste rock to access the orebody.
The Los Colorados concentrator began operations in November 1990 at a capacity of 35,000 tonnes per day, with the first concentrate shipment occurring later that year. Expansion continued steadily: an ammonia leach plant started producing copper cathode from certain concentrates in 1994 but ceased operations after four years due to economic challenges. In 1998, an oxide ore leaching facility was commissioned with an annual capacity of 150,000 tonnes of copper cathode, while Los Colorados concentrator capacity increased to 120,000 tonnes per day. The Laguna Seca mill commenced processing at 110,000 tonnes per day in 2002; production began at Escondida Norte pit in 2005; and in 2006 both a sulphide bioleach plant with a capacity for 180,000 tonnes of cathode and a desalination plant at Coloso were inaugurated.
Ownership evolved through acquisitions: BHP acquired Utah Mining; Texaco purchased Getty Oil but sold its mineral holdings shortly after. BHP then consolidated these assets before selling a 30% interest to Rio Tinto and a further 10% to JECO, subsequently divesting an additional 2.5% stake to the International Finance Corporation.
2022–2024 groundwater litigation
Beginning in 2022, the indigenous Atacameño communities initiated legal action against Minera Escondida, Albemarle, and Minera Zaldívar, citing harm to the Monturaqui-Negrillar-Tilopozo Aquifer. The Chilean government's Consejo de Defensa del Estado became involved as a co-plaintiff in the case. Minera Escondida contended that the downstream effects on groundwater had not yet become evident due to slow aquifer flow and attributed the primary cause of damage to the extraction activities of the other companies. The legal dispute was resolved in December 2024 through a settlement agreement obligating Minera Escondida and the other defendants to provide financial, social, and environmental restitution to the Comunidad de Peine, as well as to restore the affected Tilopozo wetlands and the lakes La Punta and La Brava.
Chilean economy and global copper market
Escondida plays a vital role in Chile’s economic landscape. In 2007, its revenue amounted to US$10.21 billion, which accounted for 4.3% of Chile’s total GDP of US$234.4 billion and approximately 15% of national exports. By late 2006, the mine directly employed around 2,951 workers alongside an additional 3,158 contractors.
During 2007, the average copper price climbed to US$3.23 per pound, while Escondida’s direct production costs remained low at 60.8 cents per pound, partly due to decreased smelting and refining charges. This strong profitability enabled the company to contribute US$2.2 billion in taxes to the Chilean government.
Due to its size and output, Escondida exerts considerable influence over international copper prices, as demonstrated during the August 2006 labor strike. The strike was triggered by employees seeking a share of the company’s substantial profits amid record-high copper prices. Initially demanding a 13% wage increase plus a $30,000 bonus, workers ultimately agreed to a 5% salary raise accompanied by a $17,000 bonus and additional benefits. Although production initially continued at 40%, union members blockaded access on August 16, prompting Escondida to declare force majeure and suspend operations by August 18.
Arturo Martinez, president of Chile’s Central Unitaria de Trabajadores (CUT), engaged with striking workers during this period and noted that the strike reignited conversations about copper nationalization within Chile.
