The Los Pelambres mine in Chile produces copper and molybdenum concentrates. Credit: Antofagasta plc.

Antofagasta Minerals, a subsidiary of Antofagasta, has completed the financing of the $1.3bn expansion of Los Pelambres copper mine in Chile.

Los Pelambres will use debt financing to cover the costs of the project, which will consist of $425m with a ten-year term from the Japan Bank for International Cooperation, alongside $875m with a seven-year term from a consortium of international banks.

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The consortium will consist of Mizuho Bank, Export Development Canada, Scotiabank, Sumitomo Mitsui Banking Corporation and the Bank of China.

Antofagasta CEO Ivan Arriagada said: “I am pleased the expansion of Los Pelambres has been financed on favourable terms with the support of a strong group of lenders.

“This demonstrates the significant financing capacity of the group and will enhance the already strong returns of the project.”

Los Pelambres is a sulphide deposit in Chile’s Coquimbo region, located 240km north-east of Santiago and produces copper concentrate containing gold and silver, and molybdenum concentrate through a milling and flotation process.

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Antofagasta’s board of directors approved a $1.3bn expansion of the Los Pelambres copper mine in November last year.

“This demonstrates the significant financing capacity of the group and will enhance the already strong returns of the project.”

With the expansion, the company will be able to increase production from the mine by around 60,000t of copper annually over the first 15 years of operation.

The project will involve the construction of a desalination plant and water pipeline. Antofagasta is targeting production start-up at Los Pelambres in the second half of 2021.

Antofagasta holds a 60% stake in the Los Pelambres project, while the remaining 40% is held by consortiums led by JX Nippon and Mitsubishi.