Freeport plans $7.5 billion El Abra copper mine expansion in Chile

US copper producer Freeport McMoRan plans to invest $7.5 billion to expand its El Abra mine in northern Chile, the company said July 23.

Following the completion of prefeasibility studies, the firm plans to present an environmental impact statement by the end of the year.

The project would see the installation of a large concentrator plant at the open pit mine to process sulfide resource that would replace the existing SX-EW operation as well as a desalination plant and pumping system, said Kathleen Quirk, Freeport McMoRan's CEO.

The expansion would produce around 340,000 mt/year of copper and 4,100 mt/year of molybdenum "over a very long life."

Freeport operates and owns 51% of the El Abra, which produced 98,400 mt of copper cathode last year. Codelco owns the balance of shares.

The company is moving ahead with the project, as it sees improved conditions for investment in South America.

Chile wants to see more investment in mining, as it is such a big part of their economy, Quick said, adding, "So they are very, very interested." Freeport had previously delayed any decision, citing the political uncertainty in Chile during a process to draft a new constitution and efforts by President Gabriel Boric to raise more taxes form the mining industry.

But the second of two new constitutional proposals was rejected in a referendum in December, while a mine royalty(opens in a new tab) came into force in January that puts a ceiling on the maximum tax burden that mining companies must pay.

Quirk also highlighted Boric's efforts to streamline Chile's labyrinthine permitting system, which business leaders say has become a bottleneck for investments.

"The tone has significantly changed from his initial election period, where he's met the realities of the need for Chile to help support the mining sector," Quirk said.