The Commission for Environmental Assessment of the Antofagasta Region in Chile has approved Codelco's $5.4bn Radomiro Tomic sulphides (RT sulphides) project in Atacama Desert.
RT sulphides is part of Codelco's portfolio of structural projects.
The company originally filed an environmental impact study with the environmental evaluation service (SEA) for its project in May 2013.
Codelco corporate affairs and sustainability vice-president Patricio Chavez said: "Environmental approval RT sulphides realise learning, adjustments and improvements that the project has had in these 32 months of evaluation.
"At this time, both the technical authorities, political and administrative, but especially the communities, they could express their concerns to be incorporated into the project design."
Following receipt of approval, Codelco will build a new 200,000t per day (tpd) concentrator and a desalination plant, which will have a capacity of more than 1,600l per second (l / s).
The desalination plant will be located 14km south of Tocopilla and allow the new project to operate without consuming freshwater.
The project will also include coating of the primary crusher to prevent pollution in the crushing rock process.
Other works will include strengthening of the chute for tailings spill control; control leakage of water; and crossing pipe desalinated water through a tunnel under the river Loa.
The project design incorporates various measures to protect the flora and fauna in areas such as reptile relocation to safe areas.