Antofagasta goes ahead with $4.4 billion Centinela expansion
Chilean miner Antofagasta (LON: ANTO) is going ahead with the planned $4.4 billion construction of a second concentrator at its Centinela copper mine in the country’s north, which will add 170,000 tonnes copper-equivalent a year to the company’s overall production.
The miner said that early works will begin immediately, with full construction expected to start after definitive project finance documents have been executed during the first quarter of 2024.
Chief executive Iván Arriagada said that first copper from the project is expected in 2027. It noted that this addition would help Antofagasta to progress towards its long-term ambition of 900,000 tonnes of profitable copper production and make of Centinela one of the world’s top 15 copper mines by output.
“The Centinela Second Concentrator project is a key element of our profitable growth strategy,” Arriagada said. “It will also reduce net cash costs and unlock significant value in the Centinela district’s two-billion-tonne ore reserve.”
The executive noted that the new 95,000 tonnes per day concentrator will add 144,000 tonnes of copper production, 130,000 ounces of gold production and 3,500 tonnes of molybdenum production for 36 years.
The project will be financed through a combination of direct funding from Centinela’s shareholders Antofagasta and Marubeni Corporation, which will provide about 40% of total funding, and project finance provided by lenders, the company said.
Copper shortage
Antofagasta has been taking steps to help reduce a looming copper shortage, driven by electrification and the energy transition. Arriagada said the approved project will use 100% renewable electricity and raw sea water, which will reduce the company’s environmental footprint.
“As a project, [it] represents a demonstration of our purpose of developing mining for a better future,” he said.
The development will also include a new tailings storage facility, growth in energy and other input supply infrastructure, the expansion of outbound logistics networks such as the concentrate transport system and port infrastructure.
The company, majority-owned by Chile’s Luksic family, one of the country’s wealthiest, is also considering the use of more autonomous equipment and new technologies to reuse discarded mine waste.
The Centinela mining complex, located in Chile’s Antofagasta region, was created in 2014 from the merger of the Esperanza and El Tesoro mines. It produces copper concentrates containing gold and silver, using a milling and flotation process, and copper cathodes using a solvent extraction electrowinning process.