Macquarie Capital Helps Fund Mining Roads to Chilean Copper Mine
Posted on 04/24/2022
Macquarie Capital, the corporate advisory, capital markets and principal investment arm of Macquarie Group, led a consortium that has been awarded a contract for the improvement and operation of the Ruta Minera (Build, Operate, Transform), a private industrial road in Chile. The 137km road connects the Minera Escondida, the highest producing copper mine in the world, to Ruta 5 highway, a key north-south axis in Chile. It is Macquarie Capital’s first principal investment in Chile.
Macquarie Capital was joined in the investment by local contractors Besalco S.A. and Arrigoni S.A., which will lead a series of capital improvements, maintain and operate the road in a multiyear agreement. Macquarie Capital acted as exclusive financial advisor for the project structuring and debt financing with local banks.
Constructed in 1980 in the Atacama Desert in Northern Chile, Minera Escondida produced 1,185 kilo tonnes of copper in 2020. It is majority owned and operated by BHP Billiton (at 57.5% ownership), along with Rio Tinto (at 30%) and Japan-based JECO Corporation (at 12.5% ownership). Minera Escondida is of tremendous importance to both the Chilean and world economies. Minera Escondida operates two open pit copper mines in the Atacama Desert, 170 km southeast of Antofagasta in northern Chile. It is currently the highest producing copper mine in the world. The mine is an important part of the Chilean economy, accounting for several percentage points of GDP.
JECO is a Japanese joint venture established in 1988 by Mitsubishi Corporation (at 70% ownership), Nippon Mining & Metals Co., Ltd. (at 20%) and Mitsubishi Materials Corporation (at 10%).
Macquarie Capital and the consortium have agreed to make several improvements to the road, including widening sections of it, adding third lanes for more than 20 km of road and adding hard shoulders to parts of the road. It will also introduce updated horizontal and vertical signage, surveillance cameras and security signage. In addition, various accesses will be regularized to control vehicle flow and speed. It is anticipated that the improvements will generate about 200 jobs during the construction phase and an additional 80 jobs for ongoing road operations.
