OREANDA-NEWS. Sierra Gorda, which is jointly owned by Sumitomo Metal Mining Co., Ltd (“SMM”), Sumitomo Corporation and KGHM International Ltd. (SMM, SC and KGHMI own 31.5%, 13.5% and 55% interests respectively) has completed a review of the development plan of the Project. As a result of this review, the initial capital cost required for the construction of the Project is estimated to increase from approximately USD 2.9 billion to approximately USD 3.9 billion. The three shareholders also agreed to pursue further saving plans to reduce the capital cost including adoption of a leasing program for mining equipment.

With continuing strong copper prices, construction activities in northern Chile - the largest copper producing region in the world - have increased significantly, impacting construction costs across the mining industry. Since the commencement of the construction in 2011, increases in labor costs in the mining construction industry, an increase of the construction material required, changes in the exchange rate and the other changes in the business environment, and changes to the detailed design for the construction, etc., have led to the capital cost increases. The start of the commercial production is still scheduled to be in 2014.