Chile’s state-run copper producer Codelco and Swiss commodities trader and miner Glencore have entered into a memorandum of understanding (MoU) to develop a copper smelter project in the Antofagasta region of Chile.
The partnership aims to enhance local copper processing capacity, with Codelco supplying copper concentrate and Glencore leading the development of a new smelter.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The agreement stipulates that Codelco will provide up to 800,000 tonnes per annum (tpa) of copper concentrate to Glencore for at least ten years. There is an option to extend this arrangement for additional ten years, subject to negotiation between the parties.
Glencore will construct the smelter in Antofagasta, a key mining region in northern Chile, with a planned processing capacity of around 1.5 million tonnes per annum (mtpa) of concentrate.
According to industry experts, a project of this scale is likely to require an investment of $1.5bn (1.38tn pesos) to $2bn, reported Reuters.
Glencore is set to undertake a pre-feasibility study, with both companies aiming to finalise their agreement during the first half (H1) of next year.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataEngineering studies for feasibility and permitting are expected to be completed in 2027.
Should the project proceed, construction is expected to commence in 2030, with operations set to begin between 2032 and 2033.
Codelco stated that Glencore was selected following a competitive bidding process.
The agreement is part of a broader effort by Chile to increase its domestic smelting capacity.
Currently, Chile accounts for only 6% of global copper smelting capacity, with much of its copper sent to China for processing.
China holds half of the world’s smelting capacity, and its efficient operations have led to treatment charges dropping below zero, forcing some overseas smelters to close.
Chile’s Government is seeking to address this imbalance by expanding local smelting infrastructure. This includes a $1.7bn smelter modernisation project led by state-run mining company ENAMI. The Codelco-Glencore agreement is expected to support these national objectives.
Codelco chairman Maximo Pacheco said: “We are convinced that this project will benefit not only our company, but the entire sector and the country.”
Meanwhile, Glencore has announced plans to restart operations at its Alumbrera copper mine in Argentina by the end of next year. The mine in Catamarca province last produced copper in 2018. Glencore stated that Alumbrera is expected to commence production by H1 2028.
Once fully operational, the Alumbrera mine is projected to produce approximately 75,000 tonnes (t) of copper, 317,000oz of gold and 1,000t of molybdenum over a four-year period. Glencore’s broader strategy is to expand annual copper production to around 1.6mt by 2035, aiming to reverse a multi-year decline in output.
The company anticipates that its base copper business will exceed 1mtpa by the end of 2028, placing Glencore among the world’s five largest copper producers. Glencore expects a 4% overall annual compound growth rate in copper equivalent production from 2026 to 2029, with copper output itself forecast to grow at 9.4% over the same period.
As part of its drive to improve efficiency, Glencore has eliminated around 1,000 roles to streamline its industrial operating structure, reflecting similar measures undertaken by peers such as Rio Tinto and BHP.
