Two major copper mining operations in Chile have agreed to work together in an effort to improve efficiency and reduce operating costs as ore grades continue to decline. Sierra Gorda and the Spence mine, owned by BHP, have signed a memorandum of understanding to evaluate opportunities for technical and commercial cooperation in the Sierra Gorda region.
Both operations face similar challenges. Ore quality is gradually deteriorating, operational complexity is increasing, and production volumes have come under pressure. By working together, the companies hope to identify synergies that will improve long-term competitiveness and strengthen the economics of their operations.
The agreement calls for a joint assessment of supply chains, infrastructure, and production processes. The goal is to generate economies of scale, improve operational resilience, and reduce costs through closer coordination. De Lingenfelder, President of BHP’s Pampa Norte division, said that such collaboration can help improve long-term business performance while also strengthening relationships with local communities through coordinated development in the same geographic area.
Marcelo Bustos, Chief Executive Officer of Sierra Gorda SCM, expressed confidence that mining lower-grade ore can remain economically viable. According to him, continued growth will depend on greater dialogue and cooperation—precisely the process now being initiated by the two companies.
The partnership reflects a broader trend across the global mining industry. As deposits mature and ore grades decline, producers are searching for new ways to preserve profitability. Shared infrastructure and coordinated development strategies can reduce capital expenditures and improve project economics.
Recent production figures underline the importance of these efforts. During the first quarter of 2026, both mines reported lower copper output compared with the previous year. BHP has already invested $600 million in expanding the concentrator at Spence. The project includes the addition of a new flotation circuit designed to address challenges associated with variable ore quality. A final investment decision on the next phase of expansion could be made during the first half of the company’s 2027 fiscal year. In 2025, Spence produced 254,795 tonnes of payable copper.
Sierra Gorda is also pursuing growth initiatives. The company is preparing a project to process oxide ore currently being stockpiled for future heap leaching operations. The facility is expected to produce approximately 30,000 tonnes of copper cathodes annually over a ten-year period. At the same time, Sierra Gorda is undertaking a $400 million tailings storage facility upgrade and evaluating an expansion of its fourth grinding line, a project estimated to cost around $700 million.
By combining efforts, both mining companies hope to navigate a challenging period with greater efficiency and lower costs. Shared solutions to common problems may prove faster, more economical, and more effective than pursuing them independently.
Source: MINING.COM
Image: KGHM
