Antofagasta announces $2.5bn financing for Centinela mine expansion
Antofagasta, a leading copper mining company, has announced a substantial project financing deal amounting to $2.5 billion for the development of a second concentrator plant as part of the expansion of the Centinela copper mine in Chile’s Antofagasta Region. This financing, offered as a term loan facility with a four-year drawdown period and a 12-year term, represents a significant investment in the future of copper production in the region.
The joint venture between Antofagasta, holding a 70% stake, and Marubeni Corporation, with 30%, known as Minera Centinela, has finalized definitive agreements with an international consortium of lenders. This consortium includes prominent financial institutions such as the Japan Bank for International Cooperation, Export Development Canada, and the Export-Import Bank of Korea, alongside various commercial banks including Crédit Agricole Corporate and Investment Bank, Natixis Corporate & Investment Banking, KfW IPEX-Bank, Societe Generale, and Sumitomo Mitsui Banking Corporation.
Antofagasta’s CEO, Iván Arriagada, highlighted the significance of this financing agreement, stating, “We have agreed competitive financing terms with strong international lenders, which is testament to the high-quality nature of this project. The Centinela Second Concentrator Project is a prime example of how Antofagasta can unlock value from its portfolio and our dedication to sustainable and responsible copper production. The Company remains focused on delivering growth and returns, while maintaining a strong balance sheet.”
Additionally, Antofagasta has struck a deal enabling Centinela to secure water for current and future operations from an international consortium. This agreement involves the sale of Minera Centinela’s existing water supply infrastructure for approximately $600 million, expected to be received in 2024, and the funding of an expansion estimated at $380 million by the consortium to support the mine’s second concentrator plant.
The expansion of the Centinela mine, decided in late 2023 with a total investment of $4.4 billion, will introduce a new 95 kilotonnes per day concentrator facility, approximately 7 kilometers south of the current operations, aiming to double copper concentrate production capacities.
This project is poised to increase production by 170,000 tonnes of copper-equivalent output annually, including 144,000 tonnes of copper, alongside associated gold and molybdenum by-products, with initial copper production expected to start in 2027.
The Centinela expansion project stands as a monumental stride towards bolstering copper production capabilities to meet the escalating global demand. This strategic move by Antofagasta, backed by robust international financing, not only underlines the project’s viability and the company’s commitment to growth but also signifies a considerable advance in sustainable and responsible mining practices. The integration of significant water infrastructure investments further underscores the project’s long-term vision for environmental stewardship and operational efficiency.