While copper extraction technologies have improved in recent years, which allows to recover metal from lower grade ores efficiently, mines require expansion of concentrating facilities to be economically viable. Scaling up a project requires increased costs because capital intensity that was $4,000 to $5,000 per ton of copper for a new mine in 2000, rose to $20,000 to $30,000 for existing and new mines, according to the Antofagasta’s annual report.
As new large copper discoveries become increasingly rare and barriers to enter the project development stage are higher, global copper supplies are expected to come from existing copper mines located in key jurisdictions. According to the International Energy Agency (IEA), the market share of three leading mining countries - Chile, Democratic Republic of Congo and Peru - are expected to grow from 47% in 2023 to 54% by 2040.
Let’s consider what strategies are pursued by the largest pure-play copper companies in this situation, and what projects or technologies are common in their production growth forecasts.
Codelco
The production of Chile’s state-owned Codelco founded by President Salvador Allende in 1971 during the nationalization of Chile’s copper industry amounted to 1.44 mn tons in 2024, which allowed it to regain the status of the largest copper producer, slightly overtaking BHP. Without taking into account its shares in associated companies (49% in El Abra, 20% in Los Bronces, and 10% in Quebrada Blanca), the company’s production was 1.328 mn tons.
In its presentation, Codelco considers the achieving of the production forecast to be a key turning point and a signal for the beginning of a gradual recovery in its production after a 25-year record output in 2023 (1.325 mn tons) and multiple forecast reductions caused by long-term underinvestment, depleting mines, and project errors.
In 2025, the production (excluding the associated companies), according to Codelco’s plans, should increase again to 1.391 mn tons. Codelco’s long-term target is to return to the level of 1.7 mn tons by the end of the decade, which the company had in 2019-2020. C1 cash costs (the direct production costs of a mining operation, from extraction to recoverable metal delivery, including the operating of a mine site, as well as general and administrative (G&A) costs, freight, and refining charges - ed.) fell to $1.99 per pound in 2024 from $2.03 per pound a year earlier, with a decline to $1.95 to $1.98 per pound as a guidance for 2025.
To do this, the company expects to unlock the potential of some of its projects. The resources of Codelco’s copper deposits are estimated at 171 mn tons, or 11.4% of the global ones. Codelco’s investments are expected to rise to $5.6 bn this year and will be largely focused on upgrading its mines to handle lower-grade ores. Earlier, these projects were postponed for years due to cost overruns, accidents and operational problems, and failed to deliver the promised production growth, according to the company’s own forecasts.
Source: Codelco April 2025 Corporate Presentation
At the same time, insiders from the Chilean state-owned company expressed doubts to Reuters about the feasibility of the ambitious growth strategy, because Codelco uses, in particular, such aggressive measures as postponing the necessary maintenance of its mines. In particular, maintenance is postponed at one of Codelco’s largest mines, Chuquicamata, launched in 2019, and another mine, El Teniente, according to Reuters’ sources. In addition, analysts are confident that new deposits should be developed to offset the reduced grades in the ageing mines.
One of the projects to modernize the infrastructure and extend the life of the existing mine, including a new ore transfer system to the Andina plant, was completed in April 2024. The launching of the second ore crushing line is scheduled for June 2025. The project is expected to increase the life of the Andina mine by 30 years and increase its productivity by 200,000 tons annually.
In addition to operational improvements at the Chuquicamata mine and an Andina new ore transfer system, another key to the production growth this year is the project to expand the old El Teniente underground mine that will produce 260,000 tons annually and is in the pre-commissioning stage. Another project, the Raja Inca open pit mine in El Salvador, is 90% complete.
Amid a rise in the copper price over the year, a 2-percent reduction in costs, and improved operating performance, Codelco’s EBITDA increased in 2024 by 30%, to $5.44 bn.
Although Codelco diversifies its portfolio by entering into a joint venture to develop lithium projects, the company’s CEO Máximo Pacheco predicts no dramatic changes, maintaining the focus on copper as the most important metal for the global energy transition.
Codelco relies on the CRU forecast predicting the refined copper market to shift towards a deficit in the in 2027, when supply growth (2% annually) is expected to start falling short of demand (2.5%). To satisfy 2035 copper demand, 35% of the possible projects and all probable projects need to be implemented, the company says in its presentation.
In its presentation, Codelco also lists its largest copper projects (dominated by operating mines, with Codelco’s El Teniente project being the largest one), and the risks associated with their development.
Nuevo Cobre, a joint venture with Rio Tinto (57.74%), in which Chile’s state-owned company owns 42.26%, is among the greenfield projects Codelco is involved in. Exploration of precious metals was previously made in this project in the Atacama region in the North of Chile. The joint venture was set up in 2023, and an agreement was reached in May 2025 to accelerate the development of the mining area around Nuevo Cobre.
So far, Codelco’s operating performance this year looks strong - after a slight increase in the first quarter (by 0.3%, to 296,000 tons; and profit fell by 53% year-on-year amid rising costs for maintenance and leasing the equipment), copper production increased by 22% year-on-year in April. According to Pacheco, demand for copper remains high despite the geopolitical risks, and is particularly steady in Asia, China, the United States, and Brazil.
Freeport
The US copper giant Freeport-McMoRan making big profits from its operations in the USA and Indonesia in recent years has been using its earnings not for M&A but to reduce debt and resolve a years-long dispute with the Indonesian government over ownership of the Grasberg mine. The Arizona-based company sees potential in a technology for extracting copper from the mining waste accumulated over decades.
Freeport’s CEO Kathleen Quirk says the company hopes to produce up to 800 mn pounds (about 363,000 tons) of copper a year within the next three to five years, which makes a fifth of its current total output, using this processing technology. “I’m really focused on this issue, because when we look around, we know how hard it is to develop new supply,” Quirk says.
Freeport already produces additional 90,000 tons of copper using a leaching process and plans to produce another 90,000 tons within the next two years. The company’s plans are to develop the technology to produce around 360,000 tons per year this way over the next three to five years.
In addition to the leach technology, Freeport’s growth opportunities lie in the expansion of its Bagdad, El Abra, and Safford copper districts. The expansion initiatives combined could produce 2.5 bn pounds (1.13 mn tons) of copper per year.
Source: Freeport 1sr Quarter 2025 Results Presentation
At its Bagdad mine (in Arizona), Freeport is preparing to use fully autonomous ore transportation in 2025 by converting its fleet of Caterpillar trucks to fully autonomous operation, making the mine the first of its kind in the USA and improving its operational efficiency. Freeport also evaluates the possibility to double the capacity of the plant at the Bagdad mine to produce additional 200 mn to 250 mn pounds of copper per year. An investment decision can be made by the end of 2025, depending on copper market conditions, and the project can be put into operation in 2029. Investments can amount to $3.5 bn.
In Chile, where Freeport owns 51% of the El Abra mine (the rest is owned by Codelco), the two companies plan a major expansion by building a new concentrator to add 750 mn pounds per year (the current capacity is 500 mn pounds of copper cathode per year). The plans for this year are to apply for a permission for construction, and new facilities are scheduled to be commissioned by 2033. The project that can add around 20 bn pounds of reserves is estimated at $7.5 bn. Freeport also evaluates the prospects for expanding its copper leaching process, which could boost its production in the short term.
A potential expansion at the Safford (Lone Star) mine having significant reserves, is also under consideration. The project’s pre-feasibility study is expected to be completed by 2026, with the aim of gradual increasing the production by 300 mn to 400 mn pounds per year starting from the 2030s.
In Indonesia, where PTFI, a Freeport’s subsidiary, operates Grasberg, one of the world’s largest copper-gold mines, the Kucing Liar mine is set to be launched in 2028. The mine is expected to produce over 7 bn pounds of copper and 6 mn ounces of gold from 2029 to 2041 (the year when PTFI’s current operating rights expire). When operating at full capacity, Kucing Liar is expected to produce approximately 560 mn pounds of copper and 520,000 ounces of gold per year. The remaining investment to put the Kucing Liar mine into operation is $4 bn ($500 mn of the sum coming this year). Freeport will invest another $250 mn this year to convert the Grasberg mine from coal to gas as a power source.
Freeport’s capital expenditures in 2025 and 2026 are expected to total $4.4 bn, with $1.6 bn to $1.7 bn of the sum coming from so-called discretionary projects, the largest of which are the Kucing Liar one and the Bagdad expansion project.
Freeport’s first-quarter copper sales outstripped the forecast of £850 mn reaching £872 mn. The company reiterated its full-year sales guidance of £4 bn.
Freeport’s assets in Indonesia had the lowest net cash costs ($0.64 per pound), compared to $2.40 in South America and $3.11 in the USA. Unit net cash costs for the quarter were $2.07 per pound, with annual guidance expected to be $2.05.
Freeport accounts for 70% of the refined copper production in the USA. The USA accounts for a third of copper production, 43% of copper reserves and 46% of copper resources.
Freeport has been a major beneficiary of high copper prices in the USA, driven in part by the Section 232 investigation aimed at strengthening domestic supply chains. COMEX copper currently trades at a 13-percent premium to the LME prices, compared to 2023, when there was no premium. Every $0.1 per pound of the COMEX premium translates into $135 mn in the annual Freeport’s EBITDA.
Antofagasta
The growth prospects of another ‘Top 10’ company, Chile’s Antofagasta, the leader in profitability among copper producers (52% EBITDA margin in 2024), are also associated with the expansion of its core assets and the elimination of the problem related to limited water resources.
In 2024, Antofagasta’s copper production was 664,000 tons, compared with 660,000 tons a year earlier. Net cash costs were $1.64/lb, compared with $1.61 a year earlier, with a forecast of $1.65 for this year. In 2025, Antofagasta plans to increase its copper production to 660,000 to 700,000 tons, and to achieve a 30-percent growth in the medium term due to the implementation of several projects. Antofagasta’s capital expenditures this year are expected to be $3.9 bn.
Source: Antofagasta Annual Report and Financial Statements 2024
The largest project is the construction of the second concentrator at the Centinela deposit in northern Chile to increase the annual production by 170,000 tons of copper equivalent, as well as 130,000 ounces of gold and 3,500 tons of molybdenum per year from 2027. Due to the lower grade ores, the production at Centinela decreases: in particular, 224,000 tons of copper concentrate were produced in 2024, which was 8% lower than in 2023 and 2022. After starting the construction of the second factory in 2024, a part of the deposit with a high sulphide grade was included in the company’s estimated reserves, which allowed to increase the reserves by 35%. The commissioning of the second factory will extend the mine life until 2060. The project is valued at $4 bn.
Last year, Antofagasta completed the first part of the expansion project at the Los Pelambres deposit in central Chile (319,600 tons of copper concentrate were produced in 2024), by launching a desalination plant with a capacity of 400 liters per second and an additional concentrator line. Thanks to this, Los Pelambres copper mine was able to increase its ore processing rate by 22% in 2024. The second stage of the project, valued at $2 bn, involves doubling the capacity of the desalination plant (to 800 liters per second, which will bring the company closer to a 90-percent consumption of sea water or water from secondary sources) and building a new concentrator pipeline by 2027 to reduce the risk of unplanned downtime compared to the existing concentrator pipeline.
A potential project is aimed at extending the life of the Los Pelambres mine beyond 2035 by expanding the El Mauro tailings dam to increase capacity and launch a new desalinated water pumping system. Capital expenditures are estimated at $2 bn.
Sergey Bondarenko for Rough&Polished
