Nikkei reported that Pan Pacific Copper Company said the cost of developing a major mining project in Chile will likely reach USD 3 billion up 50% from its initial projection.

The USD 1 billion cost blowout for the Caserones copper and molybdenum project stems from the stronger local currency and inflation. Under the initial plan, the Chilean peso was calculated at 580 pesos per dollar. But Pan Pacific Copper has revised its assumed exchange rate to 480 pesos to the dollar as the Chilean currency tends to move in line with copper prices. Inflation there has also driven up the costs of materials and labor.

Mr Keiichi Goto senior executive officer of Pan Pacific said that the company believes it will be able to recover the investment by 2019 as initially projected because higher copper prices also lift revenue. The cost increase will be covered by Pan Pacific Copper's owners according to their stakes. JX Nippon Mining & Metals Corporation holds 49.5% interest and Mitsui Mining & Smelting Company and Mitsui & Company have 25.5% and 25% respectively.

(Sourced from e.nikkei.com)