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Antofagasta reports leak in the underground pipeline at the Los Pelambres copper mine in Chile

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(Kitco News) - Chile-focused mining company Antofagasta (LSE: ANTO) announced today that on 31 May, Los Pelambres detected a leak in the underground pipeline that transports concentrate from the concentrator plant to the port at Los Vilos.

The company said that the pipeline was immediately shut down and the location of the leak identified, adding that preliminary assessment shows no indication of any environmental damage.

"Full access to the site is currently being blocked by some members of the community who are in discussion with the local authorities and representatives of the company. Once access is obtained the required repairs will be completed," the company said in a statement.

Importantly, Antofagasta pointed out that mining operations and processing plant continue to operate, but with limitations due to road access restrictions and with the concentrates being stockpiled at the plant.

Once the pipeline has been repaired the stockpiled material will be transported to the port using the spare capacity in the pipeline resulting in some rescheduling of sales and shipments, the company added.

"An assessment of the causes of the leak is underway and any resulting recommendations will be applied to the concentrate pipeline and the new replacement pipeline that is currently being designed and permitted, which is expected to be in operation by 2025," the company noted in a press-release.

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According to the company's statement, currently, the impact on Group copper production is expected to be limited to within the current full year guidance range, which remains unchanged at 660-690,000 tonnes, and subject to any revision following full access to the pipeline and repairs being completed.

60% owned by Antofagasta, Los Pelambres is a sulphide deposit in Chile's Coquimbo Region, 240 km north of Santiago. It produces copper concentrate (containing gold and silver) and molybdenum concentrate through a milling and flotation process.

Copper production at Los Pelambres in 2021 decreased by 9.7% to 324,700 tonnes, mainly due to the lower throughput due to water optimisation and expected lower copper grade.

The forecast production for 2022 is 290–300,000 tonnes of copper, 6.5–7,500 tonnes of molybdenum and 40–50,000 ounces of gold. Lower production is due to temporary water supply restrictions which are expected to end once the desalinated water supply system is commissioned in second half 2022.

Antofagasta operates four mines in Chile: Los Pelambres, Centinela, Antucoya and Zaldívar. All of the company's mines are open pit operations.

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