Lundin Mining Corp. [LUN-TSX; LUMI-Sweden] says processing activities have been interrupted at its Chapada copper-gold mine in Brazil.
The company said the operation suffered a power outage on the morning of September 27, 2020. When power was restored, the protection system at the operation’s main electrical substation failed, resulting in significant damage to all four SAG and ball mill motors.
Lundin said it is assessing the extent of the damage to the motors, but added early indications are that the motors will need to be removed from site and undergo extensive repair.
On Monday September 28, Lundin released an update on a fatal accident which occurred at its Neves-Corvo mine in Portugal on September 25, 2020. “Over the coming days, we will be holding safety stand-downs at all of our operations globally to reflect on the loss of our colleague and remind ourselves how we can keep each other safe,” said Lundin Mining President and CEO Marie Inkster.
“Preliminary information indicates that the accident occurred in an active production heading that was undergoing scaling activities,” the company said. A third-party has been retained to launch an independent investigation.
The company’s shares fell on the news, easing 10.4% or 80 cents to $6.90 on volume of 5.4 million. The shares are currently trading in a 52-week range of $8.59 and $4.08.
Lundin Mining has operations in Chile, the United States, Portugal, Sweden and Finland, primarily producing copper, nickel and zinc. Lundin also holds an indirect 24% equity stake in the Freeport Cobalt Oy business, which includes a cobalt refinery in Kokkala Finland.
Chapada is a 100%-owned open pit operation, producing a copper concentrate. It is located in northern Goias State, approximately 320 km north of state capital Goiania, and 270 km northwest of national capital Brasilia.
The project includes the Chapada copper-gold deposit and the Suruca gold deposit. Suraca is located 6 km northeast of the Chapada deposit.
With full year contributions from the Chapada copper-gold mine and Candelaria mining complex in Chile, the company said copper production was expected to rise by over 20% in 2020 from 235,498 tonnes in 2019. During the period in which Lundin owned the Chapada mine in 2019, the operation produced 30,529 tonnes of copper.
The operation has two spare motors. One is on site and available. The second is offsite completing rehabilitation.
The processing facility at Chapada consist of a single-line plant designed to treat sulphide ores at a capacity of approximately 65,000 tonnes/day or 24 million tonnes/year. The processing produces a gold-rich copper concentrate.
The company said it is assessing the potential for a staged resumption of processing using the two motors; however, full processing rates are not expected to be achieved for an extended period of time.
Accordingly, full year 2020 production, cash cost and capital expenditure guidance for the Chapada mine has been withdrawn.