KGHM, South32 Launch US$725 Million Chile Copper Expansion

Polish state-controlled miner KGHM Polska Miedz (FWB:KGHA.F,OTC Pink:KGHPF) and its joint venture partner South32 (ASX:S32,OTCPL:SOUHY) announced a US$725 million expansion of the Sierra Gorda copper-molybdenum mine in northern Chile, targeting a 20 percent increase in annual copper production.

The expansion will elevate the plant's processing capacity from approximately 48 million tons to 60 million tons of ore per year.

KGHM projects completion of the expansion by the end of 2029, with full commercial production capacity anticipated in the second half of 2030. The project will be financed through operating cash flows and Sierra Gorda’s available debt facilities.

KGHM, Europe’s largest mined copper producer, holds a 55 percent stake in the operation, while Australia-based South32 holds the remaining 45 percent.

In 2025, Sierra Gorda generated roughly 160,000 tons of commercial-grade copper and more than 8 million pounds of molybdenum.

“The continued development of Sierra Gorda strengthens KGHM’s presence in Chile and increases the importance of its overseas assets within the Group’s operations,” KGHM President Remigiusz Paszkiewicz said in the announcement. “In this way, we are strengthening the international side of our business, responding to the growing global demand for copper and building long-term value for the Group.”

The infrastructure investment aims to optimize existing power and water assets, including a seawater pipeline from the Mejillones area and a 100 percent renewable electricity supply, to lower the mine's C1 unit production cost.

Concurrent with the plant expansion, the joint venture is executing an exploration program targeting the Catabela Northeast zone, located immediately adjacent to the active pit.

Core drilling and geophysical surveys have confirmed continuous porphyry copper-molybdenum mineralization. Preliminary estimates also suggest a resource potential of several billion tons, which could significantly extend the operational life of the asset.

The expansion advances KGHM's strategy to broaden its global copper footprint amid tightening global supply and falling ore grades at legacy mines across South America.

Last month, KGHM formalized a global exploration alliance with BHP (ASX:BHP,NYSE:BHP,LSE:BHP) to scout and evaluate early-stage copper assets beyond their existing operational bases in Europe, the Americas, and Australia.

For South32, the expansion continues the ongoing structural overhaul of its global portfolio, anchored by a July agreement to sell the bulk of its aluminum assets to Alcoa (NYSE:AA) for up to US$5.6 billion.

The transaction builds on the Australian miner's recent divestments, which include the sale of its coal operations and its Cerro Matoso nickel mine in Colombia.

Don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.