Chile’s Atacama Desert is home to some of the world’s largest copper operations and prospective new projects.
By Charles Pitts
Chile’s state-owned copper producer Codelco is close to signing an agreement with local miner Pucobre to advance the Tovaku oxide copper project in the Antofagasta region, chairman Bernardo Fontaine said in a television interview.
The proposed partnership would give Pucobre an option to acquire 60% of the mining rights at Tovaku, with Codelco retaining a 40% interest if the project advances and agreed investment, technical and environmental conditions are met.
The project is expected to require about $870 million in investment and produce approximately 46,000 tonnes of copper cathodes a year. Industry estimates point to a possible startup around 2035, although Tovaku remains under environmental review and is years from construction and commercial production.
The agreement is part of a broader change in Codelco’s approach under new leadership. Fontaine said private-sector partnerships would be essential to the company’s expansion because they can provide capital, technology and shared risk while limiting the need for additional borrowing.
The development comes as Codelco reviews a large investment pipeline, faces difficulty in meeting its 2026 production objective and considers whether to sell certain stakes in private companies to redirect capital into its core operations.
Tovaku deal would formalize a long-running exploration partnership
Codelco and Pucobre first signed an exploration agreement for Tovaku in 2009. The proposed transaction would move the project toward a formal joint-venture structure after years of exploration and technical work.
Under the current arrangement, Pucobre holds an option to acquire 60% of the mining rights that make up the project. Codelco would retain the remaining 40% if the option is exercised and the parties satisfy the required conditions.
The project is designed around oxide copper resources, which can generally be processed through crushing, leaching, solvent extraction and electrowinning to produce copper cathodes. That production route differs from the concentrator model used at many of Chile’s large sulphide operations.
Heap-leach infrastructure is central to the oxide copper processing route planned for projects such as Tovaku.
The environmental review will remain a key milestone. Before construction can begin, the project must obtain the required approvals and demonstrate that its mine plan, water management, waste facilities and processing activities meet Chilean environmental requirements.
The long lead time also reflects the complexity of bringing a new copper project into production. Tovaku’s estimated 2035 startup means its contribution would come well after the immediate supply outlook tracked by investors and analysts in the copper price forecast 2026. However, projects entering the development pipeline now will influence the longer-term availability of copper needed for electrification, power infrastructure and industrial manufacturing.
Key facts on the Codelco-Pucobre Tovaku project
| Item | Details |
|---|---|
| Project | Tovaku oxide copper project |
| Region | Antofagasta, northern Chile |
| Proposed partner | Pucobre |
| Pucobre interest | 60% option on mining rights |
| Codelco interest | 40% if the project advances |
| Estimated investment | About $870 million |
| Expected output | About 46,000 tonnes of copper cathodes per year |
| Potential startup | Around 2035, according to industry estimates |
| Regulatory status | Under environmental review |
| Exploration relationship | Agreement first signed in 2009 |
Partnership strategy gains importance as Codelco weighs capital limits
Fontaine said Codelco’s investment pipeline totals about $34 billion, a level he said the company cannot finance entirely from its own resources.
The chairman also indicated that taking on additional debt was not the preferred solution. Codelco has invested heavily in structural projects intended to sustain production as its mature mines face declining ore grades, deeper workings and increasing technical demands.
That financial pressure is pushing the company toward partnerships that spread development costs and operational risks. In the case of Tovaku, Pucobre would become the majority partner while Codelco would maintain exposure to the project and its future production.
The model is consistent with other partnership initiatives pursued by Codelco in recent years. The company has worked with international miners on projects and operating plans involving copper, lithium and related critical minerals. Those arrangements allow Codelco to retain a strategic role while drawing on outside capital, technical expertise and project execution capacity.
For Pucobre, a Chilean mining company with experience in copper production, the proposed deal would provide a pathway into a larger development project. For Codelco, the structure could help advance a new resource without requiring it to carry the full capital burden.
The agreement has not yet been described as a completed transaction. The option structure, environmental approvals, project economics and final investment decisions will determine whether Tovaku proceeds to construction.
Codelco’s production target remains under pressure
Fontaine said Codelco’s current production trend makes it difficult to reach the company’s 2026 target of 1.34 million tonnes of copper, although he said the objective had not been abandoned.
The target is important because Codelco has been working to stabilize output after years of operational challenges and declining grades at some of its major divisions. The company reported its own production at approximately 1.334 million tonnes of fine copper in 2025, according to information published by Codelco.
A new project such as Tovaku cannot solve that near-term production challenge. With potential startup around 2035, the project would contribute to Chile’s future supply rather than offset current operational shortfalls.
That distinction is central to current copper mining news in 2026. The market is focused on the gap between immediate demand growth and the long development timelines for new mines. Projects can require years of exploration, permitting, financing, construction and commissioning before they deliver commercial output.
Tovaku’s proposed annual production of 46,000 tonnes would be modest compared with Codelco’s overall production, but it would still represent a meaningful new source of cathode supply. Its impact would depend on final reserves, operating costs, recovery rates, construction timing and market conditions at the time of startup.
Electrowinning produces finished copper cathodes from leached oxide ore.
Potential asset sales could support reinvestment
Fontaine said Codelco was reviewing whether to sell some stakes it holds in private companies and reinvest the proceeds directly into the state miner. He said the analysis was expected by November.
The comments signal that Codelco is considering changes to its portfolio as it weighs competing demands for capital. The company has interests in several operations and partnerships, and the review could assess whether those holdings remain the best use of funds compared with investments in Codelco’s own mines and structural projects.
No specific asset sale was announced. Any transaction would likely depend on valuation, partner rights, regulatory requirements and the strategic importance of the assets under review.
The possible disposals also illustrate the trade-off facing Codelco. Holding minority interests can provide exposure to production and future cash flows, but selling those stakes could release capital more quickly for projects under the company’s direct control.
That decision will be closely watched by Chilean policymakers, lenders and mining investors. Codelco is both a major copper producer and a significant source of government revenue, meaning its investment choices have implications beyond the company’s balance sheet.
Why Tovaku matters for Chile’s copper pipeline
Chile remains the world’s leading copper-producing country, but its established mines are operating in a more challenging environment. Declining grades, aging infrastructure, water constraints, permitting requirements and rising project costs have made production growth more difficult.
Partnerships such as the proposed Tovaku venture offer one response. They can combine state ownership and strategic control with private-sector financing and execution capabilities.
The approach does not eliminate project risk. Tovaku must still complete environmental review, establish a bankable development plan and secure the capital required for construction. Its projected startup is also distant enough that copper prices, technology, operating costs and regulatory conditions could change materially before production begins.
For now, the most immediate development is the expected signing of the Codelco-Pucobre agreement. If completed, it would move Tovaku from a long-running exploration relationship toward a defined ownership and development structure.
The project therefore represents two separate stories for the copper market: a potential new source of cathode supply in the next decade, and an early test of Codelco’s partnership-led strategy as the company seeks to expand while managing debt, capital constraints and near-term production pressure.
Sources: Mining Weekly reporting based on Reuters; Codelco company information