SANTIAGO Anglo American is struggling to win approval from regulators for its plan to redesign its El Soldado copper mine in Chile, two sources with knowledge of the situation said on Thursday, which could possibly lead to the suspension of operations at the mine.
Anglo American (AAL.L) wants to redesign El Soldado, which produced around 36,000 tonnes of copper in 2015, due to engineering issues. It has engaged with Chile's mining regulator Sernageomin to obtain permission for the plans.
The regulator, however, is unhappy with the planned redesign and wants Anglo to go back to the drawing board, according to the sources.
One source said an official notification may come as soon as this week.
"We are still waiting for approval of the permit for the redesigned mine plan and have not received a resolution from Sernageomin," said a source at Anglo, who requested anonymity.
"Clearly, in the continued absence of an approved permit, we may need to take appropriate measures, which may include the temporary suspension of mining while we discuss this further with the (regulator)."
The company was confident that its plan for the mine was safe, the source said, adding it had been validated by outside experts.
Sernageomin did not respond to requests for comment.
Although the mine's output is relatively small by the standards of Chile, the world's top copper producer, its stoppage could impact the market at a time when the two biggest copper mines, Escondida in Chile and Grasberg in Indonesia, have seen production grind to a halt.
Anglo holds just over half of El Soldado, part of its Anglo American Sur complex, with state-run Codelco [COBRE.UL] and Japan's Mitsui (8031.T) and Mitsubishi (8058.T) also holding stakes.
Last year, it said it would lay off 10 percent of workers at the mine, after market conditions had put the mine's operational continuity at risk.
(Reporting by Rosalba O'Brien and Felipe Iturrieta, editing by G Crosse)