Private Chilean copper producer Mantos Copper has secured $250 million to fund the expansion of the sulphides concentrator at its Mantos Blancos operation, which will extend the life of the open-pit mine until 2035 and reduce costs.
The figure includes a $150 million-loan from Glencore’s subsidiary Altonorte. Another $50 million will come from a recent copper royalty agreement with Anglo Pacific (LON, TSX: APY), the company said.
Mantos Copper also signed a $50 million copper royalty agreement with Anglo Pacific and a $25 million modification to increase the existing silver concentrate agreement with Osisko Gold Royalties.
The project extends the life of the open-pit mine until 2035 and reduces costs
The concentrator is to be expanded from a 4.3 million tonnes per year capacity to 7.3 Mtpa before the natural depletion of the oxides ore in 2023.
“The financing represents an important milestone in Mantos Copper’s strategy to extend and expand its operating mines in an efficient and sustainable manner, while reducing operational costs,” the company’s executive chairman, John MacKenzie, said in a media statement.
Mantos Copper, owned by a consortium led by British investment company Audley Capital Advisors and Orion Mine Finance Group, acquired Mantos Blancos mine from Anglo American in 2015.
The operation is forecast to produce 45,400 tonnes and 42,300 tonnes of copper in 2019 and 2020 respectively and an average of 52,400 tonnes annually during the first ten years following the completion of the concentrator expansion in 2021.
Copper, used in power, batteries and construction, is one of the most sought-after commodities, and the mining company is expected to attract the interest of many parties, especially in Chile where output has slipped in recent years.
Chile is the world’s largest copper producer, meeting more than 30% of global demand. The metal accounts for up to 15% of the country’s gross domestic product.