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    KGHM–South32 $725M Sierra Gorda expansion: capex and throughput lens for mine planners

    October 3, 2026|

    Reviewed by Joe Ashwell

    KGHM–South32 $725M Sierra Gorda expansion: capex and throughput lens for mine planners

    First reported on MINING.com

    30 Second Briefing

    KGHM and South32 have approved a $725 million expansion at the Sierra Gorda copper mine in Chile’s Antofagasta region, adding a fourth grinding line that will raise ore-processing capacity by 26% and target about 195,000 tonnes of payable copper per year by 2030. Updated ore reserves stand at 1.1 billion tonnes grading 0.39% Cu (0.46% CuEq), with resources of 1.87 billion tonnes at 0.37% Cu, supporting operations out to at least 2045 and a planned $100 million exploration campaign to 2049. The fully permitted project, managed by Sierra Gorda SCM, will create roughly 900 construction jobs and continues a technical collaboration with BHP’s nearby Spence mine to optimise low-grade ore processing.

    Technical Brief

    • Construction start is fixed for January 2027, with ramp-up to full capacity in H2 2030.
    • South32 forecasts about a 10% reduction in average operating unit costs once the line is online.
    • Sierra Gorda SCM, the local JV operator, will manage delivery for owners KGHM (55%) and South32 (45%).
    • About 900 direct construction jobs are planned, supporting regional mining services, transport and camp accommodation demand.
    • Sierra Gorda currently ranks as Chile’s eighth-largest copper producer, contributing roughly 3.1% of national output.
    • A US$100 million exploration programme between 2028–2032 will focus on the Catabela deposit to extend mine life.
    • Ongoing commercial and technical collaboration with BHP’s nearby Spence mine targets economies of scale in low‑grade ore processing.

    Our Take

    KGHM’s 55% stake in the Sierra Gorda copper operation in Chile sits alongside its Poland-backed Nowa Sól copper buildout and the new copper-focused exploration MoU with BHP, signalling that KGHM is using both brownfield expansion and greenfield growth to secure long-life copper exposure across multiple jurisdictions.

    The 10% operating unit cost reduction targeted at Sierra Gorda is strategically important given the relatively modest 0.39% Cu reserve grade, and aligns with other low-grade copper assets in our database that are prioritising throughput and cost efficiency rather than chasing higher head grades.

    With ore reserves now at 1.1 billion tonnes and operations targeted out to 2049, Sierra Gorda becomes one of the longer-dated copper–molybdenum assets in our Mining coverage, which is likely to make it a reference point for future Chilean permitting, water, and power negotiations in the Antofagasta–Atacama corridor.

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    Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.

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