Chile’s state-owned copper producer Codelco (COBRE.UL) has signed an initial agreement with Swiss miner and trader Glencore (GLEN.L) to collaborate on a large-scale copper smelter project in northern Chile. The deal aims to boost Chile’s domestic smelting capacity while providing logistical and strategic advantages for both companies.
Key Details of the Codelco-Glencore Agreement
Under the preliminary agreement, Codelco will supply copper concentrate, while Glencore will build and operate the smelter in the Antofagasta region, a hub for Chilean mining operations. The smelter is expected to have a capacity of approximately 1.5 million metric tons per year, with Codelco offering up to 800,000 metric tons of concentrate annually for at least a decade.
Industry experts estimate that the project could require an investment between $1.5 billion and $2 billion. Glencore will carry out a pre-feasibility study, with the companies aiming to finalize the agreement in the first half of 2026. Construction could begin in 2030, with operations expected between 2032 and 2033.
Strategic Importance for Chile’s Copper Industry
Chile currently accounts for only 6% of global copper smelting capacity, sending much of its copper concentrate abroad for processing, particularly to China, which controls roughly 50% of worldwide smelting capacity.
With the high efficiency of Chinese smelters putting downward pressure on treatment charges and affecting global competitiveness, Chile has emphasized the need to increase domestic smelting infrastructure. The new Glencore smelter aligns with this strategy, alongside a $1.7 billion smelter modernization led by state-run ENAMI.
Codelco Chairman Maximo Pacheco highlighted the logistical and environmental advantages of locating the smelter in Antofagasta, emphasizing its contribution to both operational efficiency and Chile’s strategic sovereignty in copper production.
Economic and Industry Implications
By increasing domestic smelting capacity, the Codelco-Glencore partnership could help Chile:
- Reduce dependence on foreign smelters
- Strengthen strategic and operational control over copper processing
- Improve treatment charge economics for local miners
- Enhance global competitiveness of Chilean copper in international markets
The project also demonstrates the growing role of public-private partnerships in Chile’s mining sector, balancing industrial expansion with environmental and operational standards.
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