The naturally occurring micro-organisms, which are easily transportable and benign to humans, act as catalysts to dissolve concentrates or sulphide ore.

Cleve Lightfoot, director of technology at the joint venture Alliance Copper Ltd. (ACL), said a feasibility study on the $50 million bioleaching plant was finished last week.

He said Codelco, Chile's state copper mining company, had said it would approve the prototype plant at its Chuquicamata mine in northern Chile. BHP Billiton's board of directors is likely to do so at a meeting this month, he said.

The companies say bioleaching could bring to life some major copper deposits lying untouched in mineral-rich South America.

"In the north of Chile and especially in Peru, there are a lot of ore bodies that have not been developed because there's not a technology up to now to treat them," he said.

"So we are now giving our owners, plus other third parties if they're interested, the chance to go in there and exploit those resources," he told Reuters at a mining seminar in Antofagasta, Chiles copper capital.

Slumping copper prices have recently led some miners to postpone investments in new projects and to curtail production until better times. But Lightfoot said this project was not conditioned on current market conditions.

The plant would work on an experimental basis but would nevertheless produce 20,000 tonnes of cathodes a year starting in 2003.

The two companies have already carried out bioleaching tests at a site in Chuquicamata.

NEW STRAIN OF BACTERIA

Bacterial leaching has been employed for years in gold and copper processing. But the so-called "second generation" thermophile strain used by ACL, is different from those used in the past and can work at much higher temperatures, making extraction easier.

Rivals in Canada and South Africa, which have already commercialized a patent for gold bioleaching, are also working on similar technology for use in base metals.

Lightfoot said ACLs breakthrough in Chile has demonstrated a new economic potential not only for undeveloped deposits but for existing operations as well, where rock now considered waste could be treated. It is applicable only to sulphide copper deposits and not oxides.

"We can unlock additional value out of the low grade material which would normally not be treated and just be put on one side," he said.

The technology is more environmentally-friendly and cuts down on infrastructure costs, he said.

If the prototype plant proves successful and ACL moves on to promote industrial-scale use of the technology, it would target copper deposits with high levels of impurities such as arsenic, which are not economically viable using conventional smelters.

"There are areas within Escondida which could have an opportunity. Chuquicamata is very rich in deposits and there's a great big ore body sitting out there which is full of arsenic which we could treat and which hasn't been exploited yet," Lightfoot said, declining to name the ore body.

Escondida, also in Chile, is the world's largest open-pit copper mine in terms of annual output.

ACL would also seek out sites where existing SX-EW (solvent extraction electrowinning) plants, which produce cathodes, are underused due to dwindling oxide reserves needed to feed the plants.

Chuquicamata is a perfect example of an underused facility. "This is a classic situation. They've got a capital investment which is sitting there not to full capacity...you move in and use that and it cuts down on your investment because you're tying into an existing center," Lightfoot said.