Copper traders, manufacturers discuss funding for Chile smelter
Chile’s Enami is in talks with manufacturers and trading firms interested in financing a $1.4-billion-plus smelting project as the top copper-mining nation looks to arrest a drop in processing capacity.
The state-owned mining company has been approached by copper users as well as global trading firms to potentially put up funds to rebuild the Paipote smelter that was mothballed early last year, CEO Ivan Mlynarz said Monday in an interview.
Sinking money into smelting would appear to make little business sense right now given there’s a global glut, which may be exacerbated by the US’s push to be self sufficient in copper. But Mlynarz says the project is viable, considering it would use more efficient technology and produce byproducts such as gold and sulfuric acid. Chile is among countries looking to boost local smelting for sustainability reasons and to ease their dependence on China.
Enami has started sounding out advisers for a process to finance the project, in which the state company will retain 100% ownership, Mlynarz said. One option is that metal buyers would essentially pay up front for copper. Multilateral lenders offer another option, he said.
Mlynarz is striving to get the project moving before the government’s term ends in March, with environmental permitting and the results of an independent audit expected to be in place by mid year.
“Today, there are a range of interested parties — that’s very different from 20 months ago,” Mlynarz said. Asked what’s changed, he said: “The certainty of the project — the probably that it will be a reality.”
Separately, Chile’s other state mining company Codelco is working on a proposal to develop a new smelter with private capital. Codelco closed one of its smelters in 2023 for environmental reasons, while a proposed toughening of emission rules poses a threat to another.
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