Bloomberg News

BHP May Agree $5 Billion Escondida Expansion, Deutsche Bank Says

January 24, 2012

Jan. 24 (Bloomberg) -- BHP Billiton Ltd., the world’s biggest mining company, is likely to approve a $5 billion expansion of its Escondida venture in Chile this quarter, according to Deutsche Bank AG.

The enlargement will include a third concentrator and increase production to 1.3 million metric tons of copper a year, Deutsche Bank analysts Grant Sporre, Rob Clifford and Tim Clark wrote in a report today.

The project may increase the bank’s valuation of Escondida to $18 billion, based on forecasts including a long-term copper price of $2.77 a pound, they said. Copper for March delivery fell 0.9 percent to $3.7645 a pound by 7:39 a.m. on the Comex in New York.

Escondida is the world’s largest copper mine, according to BHP, which owns a 57.5 percent stake. Ruban Yogarajah, a London- based spokesman for BHP, couldn’t immediately comment.

--Editors: John Viljoen, Tony Barrett

To contact the reporter on this story: Jesse Riseborough in London at jriseborough@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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