Codelco, the largest copper mining firm globally, is owned by the nation of Chile. Recently, the company secured a long-term financing arrangement backed by the World Bank. The structure is highlighted as a potential model for countries with vast mineral resources seeking to attract private investments while advancing more sustainable mining.
The latest deal involves a fifteen-year loan from HSBC and Santander to the tune of $600 million, supported by a more than $800 million guarantee from the Multilateral Investment Guarantee Agency.
It follows another $700 million+ financing arrangement backed by the agency, bringing the combined value of the two transactions to almost $1.4 billion. Rather than providing Codelco with a direct loan, the agency guarantees covered financial obligations to participating lenders. This reduces the banks’ exposure to credit risk and allows them to provide financial assistance over a longer period.
The earlier transaction included a more than half a billion-dollar loan, which came into effect in mid-2024. It was the agency’s first time providing guaranteeing for a state-owned firm in Chile as well as the maiden transaction involving a state-owned mining firm.
The two financings are being used to support the copper miner’s obligations under five long-term contracts focused on renewable energy. The loans do not finance new projects or the expansion of mines. Instead, they help cover electricity purchases from third-party generators supplying power through the South American country’s national grid.
Codelco, as the largest consumer of electricity in the country, is working toward sourcing 100% of its electricity from renewable energy by 2030.
MIGA revealed that contracts secured by the company are expected to provide renewable power for over 80% of its electricity requirements by this year’s end. The shift could provide greater cost stability by reducing exposure to fluctuating fossil-fuel prices and potential carbon-related costs.
The financing forms part of a broader World Bank push to help countries that produce minerals to convert resource wealth into wider economic development. Over in Zambia, the institution is supporting plans to expand copper production while strengthening electricity supply, transport infrastructure, and skills among its workforce.
Similar efforts are emerging in Mongolia and Argentina, where projects such as the Oyu Tolgoi copper-gold mine and the Rincon lithium development are expected to create jobs and opportunities for domestic suppliers.
The Codelco model demonstrates how development institutions can use guarantees to mobilize private financing around mining-related infrastructure without directly assuming the risks of mine construction and development. For resource-rich economies, the approach could help channel mineral wealth into broader industrial growth, infrastructure and higher-skilled employment.
For enterprises like Numa Numa Resources Inc. that are engaged in exploration and mine development, the Codelco example could offer some vital lessons on how to marshal the resources they need in future to move their projects into the production phase.
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