NEWS RELEASE, 5 JUNE
2024
Completion of process to
transfer centinela's water supply Infrastructure
Antofagasta plc ("Antofagasta" or the
"Company") is pleased to announce that, following the Company's
earlier announcement dated 19 March 2024, the process to enter into
a water transportation agreement by Minera Centinela ("Centinela"),
involving its existing water supply and future water supply to the
Centinela Second Concentrator Project, has now been
completed.
Under the terms of the agreement,
Centinela's existing water transportation assets and rights have
been transferred to an international consortium formed of
experienced partners, Transelec and Almar Water Solutions
("Almar"), with Centinela set to receive cash proceeds of $600
million during 2024. In addition, the planned expansion of the
water transportation system will now be undertaken by the acquiring
consortium, resulting in a reduction in the overall capital cost of
the Centinela Second Concentrator Project by approximately $380
million, with this reduction to be realised over the course of the
project's construction period. Following completion, the acquiring
consortium will operate Centinela's existing water
infrastructure.
The Company has assessed that the
terms of the agreement are value accretive, as previously
referenced in the Company's announcement in March. The acquiring
consortium has a track record of building and operating
infrastructure in Latin America, the Middle East and Asia,
including existing projects in Chile.
Antofagasta's CEO, Iván Arriagada said:
"Following today's news and the recently announced Centinela
Second Concentrator Financing, we are in a good position to advance
our growth ambitions in producing responsible copper for the global
energy transition at a time when the global supply of copper has a
limited ability to meet the expected medium-term rise in
demand."
Antofagasta's CFO, Mauricio Ortiz said:
"The agreement announced today is underpinned by our
long-life resource base at Centinela and our capital allocation
framework. By entering into this value accretive
agreement, we have been able to reduce the capital intensity of the
Centinela Second Concentrator Project, whilst protecting
Centinela's competitiveness."
Centinela Second Concentrator Project
The Centinela Second Concentrator
Project will add 170,000 tonnes of annual copper-equivalent
production, comprising 144,000 tonnes of copper production and
associated gold and molybdenum by-products.[1] Through this expansion, it is expected that
Centinela will improve its cost competitiveness through an
increased focus on concentrator capacity that incorporates modern
technologies, increased by-products and greater economies of scale.
First copper production from the project is expected in
2027.
Antofagasta is focused on responsible
water use as part of its purpose of delivering mining for a better
future. The Second Concentrator Project is an opportunity to
provide additional copper from the Company's existing resource base
using 100% renewable electricity and raw sea water.
About Transelec
Transelec (Transelec Group) is the
leading provider of high voltage systems in Chile, with over 11,000
kilometres of transmission lines and more than 80 substations in
Chile, powering 98% of Chile's population. Transelec is also
present in Peru, through its fully owned subsidiary Conelsur, and
in the water infrastructure industry, through its 40% stake in
Aguas Horizonte.
About Almar Water Solutions
Almar Water Solutions, part of Jameel
Environmental Services, is a leading company in the development of
unconventional water infrastructure and production, distribution,
and treatment services for both the municipal and industrial
sectors. The company specializes in the development, design,
management, financing, and operation of infrastructure, covering a
wide range of solutions such as purification, desalination,
treatment, and reuse. For more information, visit
www.almarwater.com.
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