CHILE’S state copper producer Codelco and Swiss miner Glencore have signed an initial agreement to develop a smelter in northern Chile, the companies announced Wednesday.
Under the deal, Codelco will supply copper concentrate whilst Glencore constructs the facility in the Antofagasta region with capacity to process 1.5 million tons annually, said Reuters in its coverage of the announcement. Industry experts estimate the project would require $1.5 billion to $2 billion in investment.
Glencore will now conduct a pre-feasibility study, with both companies targeting a final agreement in the first half of next year. If approved, construction would begin in 2030 and operations commence between 2032 and 2033.
Codelco selected Glencore following a competitive bidding process and agreed to provide up to 800,000 tons of concentrate yearly for at least a decade.
Chile currently accounts for just six percent of global smelting capacity and ships much of its copper to China for processing. China controls half the world’s copper smelting capacity, and its efficient facilities have driven treatment charges below zero, forcing some overseas smelters to close.
Chile aims to expand its domestic smelting capacity, including a $1.7bn modernisation programme led by state mining company ENAMI, said Reuters.
Codelco chairman Maximo Pacheco said the smelter’s Antofagasta location would deliver logistical advantages and meet strong operational and environmental standards. He added that boosting Chile’s smelting capacity would benefit Codelco whilst “strengthening Chile’s sovereignty and strategic security.”
