CEO Ivan Arriagada said the full project cost was being debt financed on favourable terms by a "strong group of lenders".
The debt financing comprises two tranches, a $425 million, 10-year tranche from Japan Bank for International Cooperation, and a $875 million seven-year term from a consortium of international banks.
The banks include Mizuho Bank, Export Development Canada, Scotiabank, Sumitomo Mitsui Banking Corporation and Bank of China.
Antofagasta said the second tranche had received a Green Evaluation from S&P Global Ratings, making Los Pelambres the first mining company to receive the evaluation.
Arriagada said the financing would "enhance the already strong returns of the project".
The expansion project was approved in November, with work starting in early 2019 and first output expected in the second half of 2021.
It should add an average 60,000 tonnes per annum of production in the first 15 years of operation.