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Centinela secures US$2.5 billion project financing
Copper mine expansion to increase production capacity by 140,000 tonnes per year
Michael Marray 20 Mar 2024

Chilean copper producer Minera Centinela has secured a US$2.5 billion project financing package to suport the expansion of its copper mine.

Japan Bank for International Cooperation is providing US$950 million. The loan is co-financed by Export Development Canada, Export-Import Bank of Korea, KfW IPEX-Bank, and a group of commercial lenders including Sumitomo Mitsui Banking Corporation, Crédit Agricole Corporate and Investment Bank, Société Générale, and Natixis.

Centinela mines sulphide and oxide deposits 1,350 kilometres north of capital city Santiago, in the Antofagasta Region, one of Chile’s most important mining areas.

The company produces copper concentrates (containing gold and silver) through a milling and flotation process, and molybdenum concentrates. It also produces copper cathodes, using the solvent extraction and electrowinning (SX-EW) processes.

Centinela’s shareholders are London Stock Exchange-listed Chilean mining concern Antofagasta plc (70%) and Marubeni Corporation. Late last year, the two companies took the final investment decision to develop a new mining area at the Centinela copper mine.

New concentrator plant

The expansion project involves the construction of a new concentrator plant to be located approximately 7 kilometres south of the existing concentrator plant, with the objective of doubling production capacities for copper concentrates.

The existing concentrator plant currently processes ore from the Esperanza and Esperanza Sur deposits. The new plant will process ore extracted from the Esperanza Sur and Encuentro deposits to produce copper concentrates.

Following completion of the expansion project, Centinela copper mine’s total annual copper production is projected to increase by approximately 140,000 tonnes per year, elevating it into the top 15 copper mines in the world by output.

As a result of this increase, the share of equity copper volume attributable to Marubeni’s interest is set to increase by approximately 40,000 tonnes annually. In addition, the production of gold, a by-product of copper mining, is expected to make Centinela one of the leading gold producers in Chile.

The copper concentrate produced at the Centinela copper mine will serve as a crucial raw material, characterized by low levels of impurities, for smelters globally, including those in Japan, thereby contributing to the stability of copper supplies on a global scale.

According to Marubeni, the expansion project’s costs are projected at US$4.4 billion, with 40% coming from the two shareholders. Construction is scheduled to begin in 2024, with production starting in 2027.

Leading copper producer

Since first participating in the development of the Centinela copper mine in 2008, Marubeni has collaborated with Antofagasta to investigate the potential for an expansion project to capitalize on Centinela District’s abundant resources.

The aim of the expansion project is to scale up the operations of the Centinela copper mine, which is renowned as being among the world’s leading copper producers in terms of both volume and cost competitiveness.

Japanese companies will offtake part of the increased production of the copper concentrates from the expansion project.

In the current trend of decarbonization, demand for copper is expected to increase globally as an indispensable metal for electric vehicles as well as renewable energy facilities and equipment, according to JBIC. Since Japan relies solely on imports for copper concentrates, it is an urgent challenge to secure a long-term, stable supply of copper resources.

Japan’s Strategic Energy Plan, which was approved by the Cabinet in October 2021, aims to achieve at least 80% self-sufficiency in base metals, including copper, by 2030.  The government has also vowed to strengthen support for Japanese refineries to reduce the procurement risk of ores and establish resilient supply chains.

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