Chilean State-owned copper producer Codelco has selected Glencore to advance plans for a new smelter in the Antofagasta region, a move aimed at increasing downstream capacity and capturing more value within Chile’s copper supply chain.

Glencore was chosen as the preferred partner following what Codelco described as a competitive process that confirmed strong industry interest and highlighted the strategic significance of expanding domestic smelting capacity.

The memorandum of understanding provides a framework for Glencore to prepare a prefeasibility study (PFS) and for both parties to negotiate binding agreements. The proposed smelter, to be located in either the Antofagasta or Tocopilla provinces, would be designed, financed, built and operated by Glencore. The plant is expected to have capacity to process 1.5-million tonnes a year of copper concentrates and meet high operational and environmental standards.

As part of the collaboration, Codelco will negotiate a long-term concentrate supply contract of up to 800 000 t/y for at least ten years, with an option to extend the arrangement for an additional decade.

Codelco chairperson Máximo Pacheco said the agreement represented “a significant step for the Chilean mining industry”, positioning the country to expand its metallurgical capabilities.

Pacheco added that locating the facility near major producers would provide logistical advantages, operational flexibility and the ability to capture added value by refining concentrates close to the source.

Glencore CEO Gary Nagle said the company was “very pleased” to have been selected as Codelco’s strategic partner. The partnership demonstrated Glencore's long-term confidence in Chile, he added. Glencore already has a significant presence in Chile, including the Altonorte smelter, the Lomas Bayas copper operation and a 44% stake in the Collahuasi mine.

Codelco and Glencore will now begin negotiating definitive agreements while Glencore undertakes the prefeasibility work. Progress will be reported under a schedule to be agreed within 30 days.

Glencore must deliver the PFS by May 31, 2026. Codelco will then decide whether to proceed. If approved, engineering and permitting work is expected to run through 2027, with environmental assessment in 2028. Construction is targeted to start in 2030, followed by commissioning between 2032 and 2033.