Enami, Ecuador's state mineral company, and Codelco, Chile's state copper company, joint venture partners in the project, expect to formalise creation of a company to continue work on the project in the coming weeks, according to Ecuador's deputy mining minister Fernando Benalcázar. Enami will own 51% and Codelco 49% of the JV company.
Benalcazar indicated some US$250 million will be spent on the project over the next four years to bring it to a construction decision, which could see Llurimagua potentially produce 210,000 tonnes per year of copper for 27 years.
Codelco has invested some $60 million since 2012 in the project, drilling 99,000m in 98 holes in the process and outlining a resource of 3.8 billion tonnes grading 0.44% containing 16.9Mt of copper.
Going forward, Enami will have to contribute towards the pro rata costs of advancing and developing the project, which raises the possibility that it will begin to have its ownership position diluted as Codelco continues to invest in the project. It is also possible that Enami will seek to find a buyer or another partner for all or part of its stake.
Codelco is unlikely to count with significant financial support in the near term from its owner, the Chilean state, either. Chile's government ruled out fresh funds for Codelco, as it plans to spend $3 billion this year to contain a wave of nationwide protests which rocked the country in late 2019, seeking greater equality and investment in social spending.
"We're not talking about a capital injection. The state has always supported Codelco in such a way that it can access financing via capitalisation or international markets," finance minister Ignacio Briones said during an interview with Radio Pauta Bloomberg.