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Chinese groups are exploring the possibility of participating in a copper smelting project in Chile — some of them in a bid to lock in supplies of a key metal in the energy transition.

Officials from state company Enami and Chile’s government met with authorities and company representatives in China last month to discuss a $1.4-billion project to overhaul Enami’s smelter, new CEO Ivan Mlynarz said in an interview from his Santiago office.

To be sure, the financing model is yet to be determined for a plan to more than double capacity at the smelter with the use of new, much cleaner technology. But in early-stage talks, interest is high from both Chinese builders and groups looking to secure metal used in everything from construction to renewable energy and electric vehicles, Mlynarz said.

“With respect to this project, we have 16 MOUs signed where we are speaking at different levels among builders, financiers and interested companies,” Mlynarz said.

The project has been boosted under the government of left-leaning President Gabriel Boric to help reduce the No. 1 coppermining nation’s dependence on processing abroad. More than half of Chile’s production is shipped in semi-processed form, with the last smelter built in 1990. More local smelting would reduce waste involved in exporting concentrates and improve traceability, Mlynarz said.

The plans coincide with a softening of the global smelting market. Processing fees have fallen amid mine disruptions and spare plant capacity. Chile’s previous government saw little sense in backing major smelting investments so far from the demand centers of Asia, Europe and the US.

Enami sees enough upside to plow ahead. It expects to have a revised feasibility study ready in August before deciding on a financing model that could include bonds issued by the company or the government. Less likely, but still possible, is a joint venture, Mlynarz said.

The plan is to be in a position to begin a 33-month construction program in the first half of 2025. At the existing Hernan Videla Lira plant, the company intends to skip maintenance next year and halt operations in early 2025.

In the gap between when the old smelter closes and the upgraded facility opens, Enami would market the copper concentrate — which comes from small miners — to other smelters or traders, Mlynarz said.

The expanded smelter could also process some copper from nearby mines run Lundin Mining Corp., which has said it’d be interested as long as it’s competitive and clean, he said.