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VIIPROCEMIN 2008. Santiago, Chile

CHAIRMANS ADDRESS

Since April 2006, when the copper price first poked through the

$3 barrier, the mining industry has been enjoying a prosperous

time, which for Chile was most significant for its large copper

and gold industry. Cochilco predicts the copper price this year will

settle at an average $3.70, and $3.40 in 2009.

Strong international demand, mainly from China, India and

Thailand, and to some degree from a few countries in the Middle

East is expected to continue, although we have currently entered

a softer market. In July Cochilco reported that in 2008 copper

demand will grow by 1.4% to 18.4 million tonnes, and to 23

million tonnes by 2011, while supply is expected to grow by 2.6%

to 18.3 million tonnes. In 2009 a small surplus is expected.

According to the ICSG (Int. Copper Study Group), in the first

five months of 2008, world mine production fell 3.1% below the

2007 level for the same period. World concentrate production was

down by 3.9% while solvent extraction-electrowinning (SX-EW)

production remained level. World production was affected mainly by

lower year-on-year output in Australia, Chile, Indonesia and Mexico,

where operational problems, labour issues, and/or adverse weather

led to an aggregated drop in production of 10% (328,000 t copper).Mine production was up in Africa (17%) but down in all the

remaining regions: America (-1.9%), Asia (-13%), Europe (-0.7%)

and Oceania (-4.8%). As a result, the average global mine capacity

utilization rate fell to about 82% in the first 5 months of 2008

from 87% in the same period of 2007.

Chile has remained worlds first position among the copper

producers with an expected about 5.59 million of tons of copper

to be produced during 2008 (although only 2.67 million mtwere produced in the first half of 2008), compared to a world

total of 16.5 million tonnes. 2.37 million tonnes of new copper

output, nearly 20 percent of the global production, will come

onto the market from 26 new copper developments in Chile from

2006-2015, according to Cochilco Chief Analyst Aldo Picozzi.

Compare this number of projects to a total, as reported by The

Dow Jones Newswire in November, of 166 copper projects to be

developed until 2015, containing a reserve of 55.2 billion metric

tonnes of ore in reserves.

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VIII

Cochilco said about 84 % of production is from greenfield opera-

tions, 14 of the new mines will produce copper cathodes from

SX/EW operations, and 12 will produce copper in concentrates.

Average copper ore grades are 0.55% and 0.74 % respectively. Next

after Chile in terms of new mines or brownfield development is Peru,

with 19 new projects due over the nine-year period. Canada will see

18 new projects, Australia 14 and the Democratic Republic of

Congo 12.

According to Brook Hunt, highly probable expansions and devel-

opments are those at Antamina, Cadia, Miheevskoye, Los Bronces,

El Abra, Collahuasi, Antapaccay Tia Maria, Toromocho, Rio Blanco,

and Oyu Tolgoi. Among the larger probable developments are Escon-

dida Phase 5, Olympic Dam, Bingham Canyon, Tenke-Fungurume,

Andina, Cananea, etc. Latin America accounts for 73% of total con-

tinental projects and 42% worldwide. America comprises 58% of

these projects, Asia 15%, Africa 14%, Oceania 9% and Europe 4%.

Worldwide average copper grade is 0.71% for concentrate produc-

tion and 0.66% for EW cathode production. According to Brook

Hunt the average worldwide capital intensity for copper projects in

construction amounts to about $8,217 per ton of fine copper, while

this number is set to increase to about $8,881 and $9,082 respec-

tively for probable and possible projects in the pipe line.In June Metal Bulletin reported that, in 2007, 1,821 companies

spent $9.9 billion on non-ferrous metals and minerals exploration

surveys worldwide, of which over US$ 2 billion in copper, from which

about US$ 360 million were destined for Chile. You may all have

heard about two large recent discoveries in Chile, Escondida Pampa

with over one billion tonnes in mineralization with average grade be-

tween 0.7 and 0.8 % copper, and Codelcos La Casualidad, with over

300 million tonnes of copper. Escondida alone is reported to set aside

about US$ 325 million for further exploration of that prospect.

Gold producers have also undertaken costly initiatives in our

country headed by Barricks Pascua Lama with US$ 2.4 billion in

investments. This project was delayed for several years first due

to dificulties in obtaining the environmental permits and now due

to problems in tax negotiations between Chile and Argentina. El

Volcn project of Andina Minerals worth US$1,000 million and

Cerro Casale of Barrick Gold (at US$2.3 billion) are also important

gold projects. 2007 Exploration costs in Chile have amounted to

over US$ 4.2 billion.

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IXPROCEMIN 2008. Santiago, Chile

I realize that I may have bored you with a lot of numbers. But

then again, it is the numbers game that makes us tick, and pushes

us to new projects and new technologies to produce copper from

ever lower grade deposits. The importance of a conference such as

Procemin 2008 is to briefly take a breath and review what is being

developed on both the production and the technology front. I am

sure that the papers in these Proceedings will satisfy your appe-

tite to that respect.

Dr. Bert Huls

Chairman

V International Mineral Processing Seminar

PROCEMIN 2008