CVRD starts up Sossego copper mine

Friday, July 2, 2004

Brazilian mining giant CVRD (NYSE: RIO) started operations at its first copper mine, Sossego, on Friday (July 2) in the Carajas mining district of northern Brazil's Pará state.

The company invested US$413mn in the greenfield project. Sossego hosts two ore bodies, Sossego and Sequeirinho, with proven and probable reserves of 244.7Mt of copper ore.

Copper content is estimated at 1%, with approximately 0.26g/t of gold, which will be produced as a byproduct. The Sossego copper ore is processed by a 467,000t/y plant to produce copper concentrate, equivalent to 140,000t/y of copper. The life of the mine is slated at 17 years.

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Sossego is the first of five copper mines CVRD has in the pipeline. By the end of 2010, the company forecasts investments to reach 6bn reais (about US$2bn) and annual output of copper concentrate of 650,000t.

"The investments in copper will generate US$2bn in foreign exchange by 2010," said CVRD president Roger Agnelli.

Brazil's president Luiz Inácio Lula da Silva and mining minister Dilma Rousseff were present at the opening. Lula noted the strong peformance of CVRD in boosting the country's foreign exchange, while Rousseff femphasized the investments in copper will help diversify Brazil's mineral exports, which are currently dominated by iron ore and bauxite/alumina.

Sossego made its first export of 30,000t of copper concentrates at the end of June. Chief export markets are Europe and Asia. Before Sossego, Brazil was a net importer of copper concentrates.

Rio de Janeiro-based CVRD is South America's largest diversified mining company.