Copper mining major Antofagasta has secured project financing of $2.5bn for setting up a second concentrator plant as part of the Centinela expansion project in the Antofagasta Region in Chile.

In this connection, Minera Centinela, a joint venture between Antofagasta (70%) and Marubeni (30%), has inked definitive agreements with a consortium of international lenders.

The $2.5bn project financing is being offered in the form of a term loan facility with a drawdown period spanning four years and a term of around 12 years.

It has been sourced from an array of international lenders, including the Japan Bank for International Cooperation, Export Development Canada, and the Export-Import Bank of Korea.

Various commercial banks such as Crédit Agricole Corporate and Investment Bank, Natixis Corporate & Investment Banking, KfW IPEX-Bank, Societe Generale, and Sumitomo Mitsui Banking are also part of the consortium.

Antofagasta CEO Iván Arriagada said: “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.”

Furthermore, an agreement has been announced by Antofagasta which grants Centinela the opportunity to procure water for its present and future endeavours from an international consortium.

The consortium would acquire Minera Centinela’s current water supply infrastructure and implement an extension to cater to the mine’s second concentrator plant. The completion of the agreement necessitates the international consortium to finalise its funding, which is anticipated to conclude within the year.

As per the terms of the agreement, Minera Centinela will transfer its existing water conveyance assets and entitlements for an estimated sum of $600m to be received in 2024.

Additionally, the consortium will undertake the construction and associated capital expenditures for the proposed expansion of the water conveyance system, estimated at around $380m.

In late 2023, Antofagasta and Marubeni decided to proceed with the expansion of the Centinela copper mine with an investment of $4.4bn. This involves the addition of a new 95 kilotonnes per day (ktpd) concentrator facility approximately 7km south of the existing facility with the aim to double the production capacities for copper concentrate.

The Centinela Second Concentrator Project is set to boost production by 170,000 tonnes of copper-equivalent output, consisting of 144,000 tonnes of copper annually alongside associated gold and molybdenum by-products.

Initial copper production from the expansion project is anticipated to commence in 2027.