Copper Investing in Chile's Coastal Cordillera Belt

Unique geological profile

The Chilean Andes represents the most copper-rich province on Earth, with a 2005 report showing estimated total resources of roughly 490 million tonnes, including mined material, across more than 63 porphyry copper deposits and multiple prospects. Recently, a 2022 data compilation on copper porphyry deposits in the Andes mountain found that the deposits in Chile's portion held an estimated 1.28 billion tonnes of contained copper, showing that the region's resource potential continues to be unearthed.

Formed between the early to late Cretaceous and Pliocene eras, copper porphyry deposits in this region occur seven distinct metallogenic belts that span Chile, Peru and northwest Argentina. Six of these belts are situated within Chile.

This arrangement is not extraordinary in and of itself — mineral belts often occur in close proximity to one another. What makes the Chilean Cordillera distinct is how it was formed. The geological history of the Andes is incredibly complex, defined simultaneously by sedimentation, tectonic deformation and magmatism.

There is no evidence of terrane collision in this region, with most of the formations in the area tied to subduction. This resulted in the creation of a back-arc basin which eventually evolved into a continental arc. During the initial formation of the Coastal Cordillera, it was subject to these same geologic forces.

However, the Coastal Cordillera also underwent several accretionary processes that caused the formation of a very different mineral profile. This likely played a significant role in the formation of the Cordillera's unusually rich gold and copper porphyry deposits, the presence of which has fascinated geologists for decades. Said deposits are much closer to the surface than those in the nearby Andes mountains, where many of the deposits are buried deep underground and require extensive mineral processing and removal methods.

Ideal mining landscape

The Coastal Cordillera belt has several distinct advantages over other mining regions within these mountains, which together make it an incredibly promising target for mining, exploration and investment.

Terrain and climate

The Coastal Cordillera belt's low altitude means minerals in the region are generally far easier to access than those in the adjoining Andes Mountains. Altitude sickness is far less of a concern at mining sites along the coast, and it's far less logistically complex to deploy and operate heavy machinery. Workers in the region also do not require high-altitude training or equipment modifications.

The region's terrain also contributes to its milder climate. While the mountains are known for their extreme temperatures and harsh weather conditions, the coastal region is generally mild and dry, with lesser snow and rainfall levels. This minimises the need for winterised equipment while also reducing both operating and energy costs.

Factoring in the fact that the minerals in the Coastal Cordillera all tend to be close to the surface, provides a clearer picture of why the region's geology is regarded so favourably.

Existing infrastructure

The presence of vital infrastructure in the region also means reduced capital costs when establishing new mining projects. Moreover, because the area contains multiple major ports, cities and roads, it's far easier to hire staff, locate equipment, source raw materials and export produced minerals. In comparison, the Andes mountains are significantly more remote and require more complex logistics and higher transportation costs.

Regulatory environment

Chile's mining industry has a long history and plays a crucial role in the country's economy. The Chilean government has created an environment that ensures an attractive mining regime, from both a sociopolitical and economic perspective, with policies and regulations that promote mining and resource extraction.

In addition, Chile's labor force in the resource sector is highly qualified, with access to some of the latest and most sophisticated mining technologies in the world.

Recent discoveries in the Cordillera belt

Currently, over 90 percent of Chile's mineral output comes from large mines such as Kingsgate Consolidated's (ASX:KCN,OTC Pink:KSKGF) Cerro Grande gold-silver mine, Mantos Copper's Mantoverde copper mine and Antofagasta Minerals' (LSE:ANTO,OTC Pink:ANFGF) Los Pelambres mine. There have been several significant copper discoveries within the belt in recent years, all of which further contribute to the region's investment attractiveness.

Culpeo Minerals (ASX:CPO,OTCQB:CPORF), for instance, maintains a portfolio of several high-grade copper assets in the region, including the recently acquired Lana Corina project. Situated near Chile's Coquimbo region, the project is defined by near-surface breccia with high-grade copper mineralisation and walk-up drilling targets. Early this year, Culpeo completed a drilling program that confirmed a significant volume of copper and molybdenum.

This means that Lana Corina bears at least a passing similarity to Minera Lumina Copper Chile's Caserones mine. Situated in Chile's Atacama region, it is among the newest operating copper mines in the country, having begun production in 2014. The mine produces roughly 105,000 tonnes of copper concentrate per year from a resource-rich copper-molybdenum deposit.

Sociedad Punta Del Cobre SA's El Espino mine is another promising recent discovery. It bears a significant volume of mineral resources and is expected to produce roughly 26,000 tonnes of fine copper and 13,000 ounces of gold per year. With an estimated investment of US$490 million, the mine is expected to begin operations within the next several years.

There's also the Quebrada Blanca Phase 2 project, which will feature the large-scale use of desalinated saltwater in its operations. This is a first for the Tarapacá Region, where the mine is situated. Jointly owned by Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK), Sumitomo Metal Mining (TSE:5713) and ENAMI, the mine rests atop one of the largest undeveloped copper resources in the world.

Takeaway

Chile has long been an incredibly attractive region for mining exploration and development, with its Coastal Cordillera belt potentially becoming a significant resource for copper production. As demand for copper continues to rise alongside the need for sustainable power, the area is likely to see considerable investment in the coming years. As mining companies continue to explore the Coastal Cordillera, investors can expect an influx of new projects, each promising in its own way.

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