Chilean state copper companies Codelco and Enami are exploring the possibility of a joint venture (JV) to bolster the nation’s smelting capacity, reported Bloomberg, citing people with knowledge of the matter.
A working group is currently assessing the potential for collaboration between Enami’s project to revamp a closed smelter and Codelco’s initiative to construct a new facility.
The discussions, still in preliminary stages, could lead to a partnership aligning with Chile’s processing needs or even a merger of the two projects.
The initiative comes as Chile, the world’s leading copper producer, prioritises strengthening its smelting capabilities under President Gabriel Boric’s administration.
A modern smelter would not only be more environmentally friendly but also reduce the waste associated with exporting semi-processed copper concentrates.
Currently, more than half of Chile’s copper exports are in this semi-processed form, and the country has not had a new smelter in 30 years.
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By GlobalData
Despite the current global surplus of smelting capacity and historically low processing fees, Chile is considering this expansion due to sustainability concerns and geopolitical shifts, particularly in response to China’s control over the battery supply chain.
The talks between Codelco and Enami commenced following Enami’s sale of its Quebrada Blanca mine stake to Codelco in September, with both companies agreeing to explore cooperative opportunities in smelting and refining.
Enami’s Hernan Videla Lira plant, which ceased operations in February due to financial losses, is awaiting upgrade approvals and financing solutions.
In April, Mining Minister Aurora Williams said companies “from both the East and the West” have expressed interest in the project.
Codelco has also received expressions of interest for its greenfield smelting project, and according to the sources, it could become an offtaker in a privately managed initiative.
Last year, Codelco entered into discussions with Aurubis, a European smelter, to investigate collaborative opportunities in Chile.
Codelco’s smelting operations have faced environmental challenges, leading to the closure of one plant in 2023 and potential regulatory threats to another.
Jorge Riesco, head of Chilean industry group Sonami, emphasised the strategic importance of expanding local smelting capacity, particularly as mine output is expected to increase to meet the demands of the energy transition.
Recently, Reuters reported that Chile plans to inject approximately $83.9bn (81.9trn pesos) into its mining industry from this year through 2033.
