Antofagasta secures funding for Los Pelambres expansion project

Management at Chilean miner Antofagasta Plc. (LON: ANTO) was able to secure this week full funding for the expansion project of its flagship Los Pelambres copper mine.

The operation, located about 200 kilometres north of Chile's capital Santiago is responsible for about half of the company’s total copper output, which this year is expected to be somewhere between 750,000 and 790,000 tonnes of the red metal.

Los Pelambres’ expansion should add an average 60,000 tonnes per annum of production in the first 15 years of operation, starting with 40,000 tonnes in the second half of 2021 when completion is expected and increasing by an additional 20,000 tonnes towards 2036.

"The expansion of Los Pelambres has been financed on favourable terms with the support of a strong group of lenders" – Ivan Arriagada, CEO of Antofagasta

The first phase of the expansion project is already underway and, according to Antofagasta, after seeing positive progress, “a strong group of lenders” stepped forward with $1.3 billion in financing.

The borrowed amount is to be used, among other things, for a $500-million, 400-litre per second desalination plant and a water pipeline that will supply the water requirements of the expansion and, potentially, future ones.

The debt financing consists of two tranches, one of $425 million with a 10-year term from Japan Bank for International Cooperation and the other of $875 million with a 7-year term from a consortium of international banks that include Mizuho Bank, Export Development Canada, Scotiabank, Sumitomo Mitsui Banking Corporation and Bank of China.

In a media statement, the South American miner said that the second tranche received a Green Evaluation from S&P Global Ratings, which makes Los Pelambres the first mining company in the world to receive this kind of evaluation that focuses on industries that are working towards reducing their carbon footprint.