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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_____________________________________________________________________________________________
Cautionary Statement
This announcement contains certain
forward-looking statements. All statements other than historical
facts are forward-looking statements. Examples of forward-looking
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strategy, plans, objectives or future operating or financial
performance, reserve and resource estimates, commodity demand and
trends in commodity prices, growth opportunities, and any
assumptions underlying or relating to any of the foregoing. Words
such as "intend", "aim", "project", "anticipate", "estimate",
"plan", "believe", "expect", "may", "should", "will", "continue"
and similar expressions identify forward-looking
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Forward-looking statements involve known and
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are beyond the Group's control. Given these risks, uncertainties
and assumptions, actual results, performance or achievements could
differ materially from any future results, performance or
achievements expressed or implied by these forward-looking
statements, which apply only as at the date of this report. These
forward-looking statements are based on numerous assumptions
regarding the Group's present and future business strategies and
the environment in which the Group will operate in the future.
Important factors that could cause actual results, performance or
achievements to differ from those in the forward-looking statements
include, but are not limited to: natural events, global economic
and financial conditions (which may affect our business, results of
operations or financial condition); various political, economic,
legal, regulatory, social and other risks and uncertainties across
jurisdictions in which the Group operates; changes to mining
concessions or the imposition of new mining royalties, or changes
to existing mining royalties in the jurisdictions in which the
Group operates; the Group's ability to comply with the extensive
body of regulations governing the mining industry, as well as the
need to manage relationships with local communities; the ongoing
effects of the global COVID-19 pandemic; demand, supply and prices
for copper and other long-term commodity price assumptions (as they
materially affect the timing and feasibility of future projects and
developments); trends in the copper mining industry and conditions
of the international copper markets; the effect of currency
exchange rates on commodity prices and operating costs; the
availability and costs associated with mining inputs and labour;
operating or technical difficulties in connection with mining or
development activities; risks, hazards and/or events and conditions
inherent to the mining industry, which may affect our operations or
facilities; employee relations; climate change as well as the
effects of extreme weather conditions; the outcome of any
litigation arbitration, regulatory or administrative proceedings to
which the Group is and may be subject in the future; and actions
and activities of governmental authorities, including changes to
laws, regulations or taxation.
Except as required by applicable law, rule or
regulation, the Group does not undertake any obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Past
performance cannot be relied on as a guide to future
performance.
No statement in this announcement is intended
as a profit forecast or estimate for any period. No statement in
this announcement should be interpreted to indicate a particular
level of profit and, as a consequence, it should not be possible to
derive a profit figure for any future period from this
report.
