El Boleo

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El Boleo is a copper-cobalt-zinc-manganese deposit located adjacent to the port city of Santa Rosalía, Baja California Sur in Mexico. It includes a historic open pit copper mine, as well as underground workings. Mining began in the 1860s, and continued, off and on, until the 1980s. The property is currently under development by a consortium of Korean companies led by Korea Resources Corporation. Preliminary underground mining began in 2012. The $1.75 Billion project is scheduled for completion in 2013.

Santa Rosalía, Baja California Sur Place in Baja California Sur, Mexico

Santa Rosalía is a town located in the Mulegé Municipality of northern Baja California Sur, Mexico. It is on the Gulf of California coast of the Baja California Peninsula. As of 2015, the town had a population of 14,160 inhabitants. It was once a company town.

Open-pit mining surface mining technique of extracting rock or minerals from the earth

Open-pit, open-cast or open cut mining is a surface mining technique of extracting rock or minerals from the earth by their removal from an open pit or borrow.

Contents

History

Early history

The discovery of the copper ore in the region is historically credited to a rancher named José Rosas Villavicencio in 1868. Minor mining activities were carried out on site by Mexican and German operators until 1885. But the small scale of the operation and the desolate location made the enterprise only marginally economic.

Compagnie du Boleo

Boleite (dark blue) and atacamite (blue-green) in clay, a high-grade ore specimen from El Boleo Mine. Boleite-Atacamite-122984.jpg
Boleite (dark blue) and atacamite (blue-green) in clay, a high-grade ore specimen from El Boleo Mine.

El Boleo was first operated, on a large commercial scale, in 1885 by the French company Compagnie du Boleo which obtained control of the property and began mining, after receiving an extensive concession and 70-year tax exemption granted by Mexican president Porfirio Diaz. Diaz apparently hoped that the mine would create a development zone in the arid and unpopulated region. 1885 is also considered the official date of the town's foundation.

The extraction of ore from the mines was labour-intensive. Chinese, Japanese, Yaqui Indians and Mestizos were brought in to work in the mine. It has been reported that many died of illness or accidents associated with the poor working conditions.

As the ore was extremely rich, (apparently a complex mixture of oxides and sulfides of up to 15% Cu) it could be fed directly to the smelter without pre-processing other than crushing. There were 7 relatively small reverberatory furnaces in the smelter and, in the 1930s, a pair of Peirce-Smith converters [ fr ] were added to produce blister copper (98% copper). Due to the complex metallurgy, no attempt was made to extract the cobalt, zinc, and manganese. The company created an artificial harbour from the slag of the smelter, which still endures almost unchanged to the present day.

Reverberatory furnace

A reverberatory furnace is a metallurgical or process furnace that isolates the material being processed from contact with the fuel, but not from contact with combustion gases. The term reverberation is used here in a generic sense of rebounding or reflecting, not in the acoustic sense of echoing.

In the early 20th century, the company was renowned for using technology considered to be state-of-the-art for ore processing and refining. The powerhouse, by L'usine électrique, was considered the most advanced electrical system of its time in Mexico. Not surprisingly, it worked well until the 1970s, when it was finally shut down.

The French community also established a hospital to treat the mine's workers. The Greek doctor Diamant Hadji-Mihaloglou was briefly in charge of the medical services at the hospital; he then returned to France.

The French company operated until 1954, when the tax exemption expired. The project then went bankrupt and the mine was shut down.

Mexican government operation

After 1954, the Mexican government through its Mining bureau (Namely the Comisión de Fomento Minero) reopened the works under the name of CMSRSA (Compañía Minera Santa Rosalía) to prevent the economic collapse of the town. It operated, continually at a loss, using the same (rather archaic) equipment and processes until 1984, when it definitively closed.

Canadian operation

In 1992, renewed interest by Canadian investors led to the establishment of a new mining claim. Subsequent exploration established that vast amounts of copper ore, as well as commercial quantities of cobalt, zinc, and manganese still existed on the site. Over a fifteen year period, two test mining programs, two process pilot campaigns, and a +38,000 metre in-fill drill program were carried out, culminating in a Definitive Feasibility Study (DFS). The DFS was completed in 2007 by the current lease holder - Minera y Metallurgica del Boleo - and followed by a Technical Report update issued in March 2010. Boleo is expected to yield copper-cobalt-zinc-manganese and is fully permitted. However, the old metallurgical process used by previous operators is unfit for the recovery of these values. Small scale testing has established that a hydrometallurgical process can effectively recover all four metals, with competitive economics. The hydrometallurgical process, and the lack of fresh water at the site requires the construction of a desalination plant.

Manganese Chemical element with atomic number 25

Manganese is a chemical element with symbol Mn and atomic number 25. It is not found as a free element in nature; it is often found in minerals in combination with iron. Manganese is a metal with important industrial metal alloy uses, particularly in stainless steels.

Hydrometallurgy is a method for obtaining metals from their ores. It is a technique within the field of extractive metallurgy involving the use of aqueous chemistry for the recovery of metals from ores, concentrates, and recycled or residual materials. Metal chemical processing techniques that complement hydrometallurgy are pyrometallurgy, vapour metallurgy and molten salt electrometallurgy. Hydrometallurgy is typically divided into three general areas:

Construction at Boleo re-commenced in November 2010. Construction cost overruns reported by Baja Mining Corp. (TSX: BAJ) in 2012 threatened to halt or delay construction of the project.

A cost overrun, also known as a cost increase or budget overrun, involves unexpected incurred costs. When these costs in are in excess of budgeted amounts due to an underestimation of the actual cost during budgeting, they are known by these terms.

Korean operation

An agreement was reached in July 2012, transferring majority ownership interest and control of the project to the Korean consortium, in return for funding the reported cost overruns. The Korean consortium led by Korea Resources Corporation (“KORES”), a state owned resources enterprise of the Republic of Korea, currently holds 73.8% of the ownership interest in Minera y Metallurgica del Boleo ("MMB") and it is anticipated that this will increase to 90% in 2013. [1] Construction continues, with mechanical completion and copper production targeted for early 2014.

Since obtaining control of MMB, CEO of KORES, Dr. Jung-Sik Koh, has reorganized its operational structure and dispatched mineral prospecting, grade control, mining, hydrometallurgy, and construction specialists to normalize operations at the project. With respect to construction of the project, a team of Korean construction monitoring team, led by KORES appointed COO at MMB, has been carrying out site construction supervision, inspection and expediting EPCM work since November 2012. Additionally, to optimize mining efficiency and secure additional tonnage at the site, MMB has been working closely on updating the geological model and mine design in cooperation with SRK and AAI.

With respect to the project financing, a portion of MMB’s 2010 project financing facilities (the “2010 Project Financing”) provided by the Export‐Import Bank of the United States (“US EXIM”) to MMB has been renegotiated under Korean leadership. In September 2010, US EXIM, the largest lender in the 2010 Project Financing, agreed to provide MMB with an approximately US$419 million loan facility for the construction and development of the Boleo project (the “Original US EXIM Facility”). The Original US EXIM Facility was terminated in late 2012 and KORES has negotiated a new approximately US$419 million facility with US EXIM, to be used to finance further construction and development of the Boleo project. [2] KORES anticipates to normalize the remainder of the 2010 Project Financing with the syndicate of the lenders in due course.

Geology

The ore (mineralization) occurs in a strata bound form known as mantos in El Boleo Formation which is a range of clastic sedimentary rocks from siltstone to sandstones, with some claystone. They were deposited in the late Miocene in deltas and near-shore shallow marine basins. Resting unconformably above the El Boleo Formation are the Gloria, Infierno and Santa Rosalía Formations of the Pliocene and Pleistocene. [3]

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