A source from the environment ministry's regional evaluation office told BNamericas that Chilean iron and steel group CAP's environmental impact assessment for a USD 70 million expansion to its Punta Totoralillo port in northern region III has been approved.

The project will increase iron ore capacity at the port's stockpiling facility by 3 million tonnes per annum to 7 million tonnes per annum. The port will also be able to handle 1 million tonnes per annum of copper concentrate.

Works involve building new reception and storage systems, reinforcing and improving existing docking areas and connecting the new facilities with the port's loading system.

Following approval, CAP, through its mining branch CMP, will launch tenders for construction, with works scheduled to begin in January 2012 and wrap up in August 2013. The new facilities will handle the increase in iron ore concentrate coming from CMP's Cerro Negro Norte project in the same region. The project saw its CAPEX increase from a previous estimate of USD 575 million to USD 800 million.

The company said that the increase is the result of the scarcity and higher cost of construction and engineering services; a lack of skilled human resources; higher prices and due dates for equipment delivery; the increase in the price of oil and other inputs and the impact of a stronger Chilean peso compared to the US dollar.

CAP added that these factors also combined to push the start up of operations at Cerro Negro Norte forward from the original Q1 2013 to the fourth quarter of the same year. Despite the CAPEX increase, Cerro Negro Norte's profitability remains positive as a result of strong fundamentals for the iron ore market.

(Sourced from www.bnamericas.com)