BHP Billiton advances Isla Riesco coal position

Friday, January 19, 2007

Anglo-Australian resources group BHP Billiton (NYSE: BHP) plans to wrap up by end-2008 a feasibility study on its Estancia Invierno coal project on Isla Riesco in southern Chile's Region XII, where it is also eyeing additional concessions, reported local newspaper La Prensa Austral.

BHP Billiton has been conducting assessment exploration activities on Isla Riesco since October 2005 in order to define the extent of the coal resource, the company told BNamericas previously.

Based on the results, it has recently launched a phase 2 drill campaign.

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The company acquired the Estancia Invierno coal concessions in April 2006 through the acquisition of Minera Otway. The latter had won the right to rent the Estancia Invierno property from Corfo in a public tender in 2002.


Executives from BHP Billiton have confirmed to Region XII governess Eugenia Mancilla and regional mining authority Mario Maturana its interest in additional coal concessions on the island up for tender by Chilean state development agency Corfo, the report said.

Last month, SEP (a part of Corfo) launched the tender - through an option to purchase - of coal claims that cover the Río Eduardo and Elena concessions; 290 properties totaling 2,900 hectares.

The two areas hold some 100Mt of coal, SEP asset management executive Leonardo Valenzuela told BNamericas previously, adding BHP Billiton had consulted SEP about the auction.

The bidding rules have been available since January 2 for 500,000 pesos (US$940), and the consultation period will last until February 19. The data room will be open until March 2, while offers can be made up until 11:59am on May 15. The envelopes will opened at 12pm the same day.

Switzerland-based private resource company Glencore International and local fuel alliance Ultramar-Copec Combustible have also shown interest in the Isla Riesco coal concessions.

Isla Riesco is Chile's most important source of coal, and contains upwards of 300Mt of subbituminous coal, a type of coal with a lower carbon content, according to the paper.