Mercuria's $375M Deal to Secure Chilean Copper for Energy Transition

SANTIAGO, CHILE – December 29, 2025

Global commodity trading giant Mercuria Energy Trading has executed a landmark agreement for the El Espino copper-gold project in Chile, committing a financial facility of up to US$375 million and securing the right to purchase its future output. The deal with El Espino SpA, a subsidiary of Chilean miner Pucobre, marks a significant strategic push by Mercuria into the critical minerals essential for the global energy transition and reinforces investor confidence in Chile's mining sector.

The multi-faceted agreement provides a crucial refinancing package for the construction-ready project and establishes Mercuria as the primary offtaker for up to 100% of the copper and gold concentrates produced during the mine's initial years. Production at the El Espino site, located in the Coquimbo Region, is scheduled to commence in 2027.

A Strategic Pivot to Transition Metals

This agreement is a cornerstone of Mercuria's aggressive expansion from its traditional oil and gas trading roots into the burgeoning metals market. As the world electrifies, the demand for copper—a metal indispensable for electric vehicles, renewable energy infrastructure, and grid modernization—is skyrocketing. Mercuria's move is a clear signal of its intent to become a dominant player in the supply chain for these transition-critical materials.

"This agreement aligns with Mercuria’s strategy to grow its metals business and deepen our footprint in Chile," said Kostas Bintas, Global Head of Metals and Minerals at Mercuria. The company's dedicated metals division, formally established in 2024, has rapidly scaled to include approximately 150 professionals and has already proven highly profitable, validating its strategic pivot.

By securing direct access to mine output, commodity traders like Mercuria gain deeper market insight and supply chain control. This strategy contrasts with more conservative competitors and positions the company to capitalize on the structural shift in global energy consumption. The El Espino deal not only secures physical supply but also embeds Mercuria in the financing and development of new resource projects, a move that is becoming increasingly common among energy traders diversifying their portfolios.

De-Risking Chile's Next Major Copper Project

The El Espino project is poised to be the first greenfield copper mine constructed in Chile in a decade, a significant development for the world's largest copper-producing nation. The project is expected to produce an average of 26,000 tons of copper and 13,000 ounces of gold annually over an 18-year mine life. This will nearly double the production capacity of Pucobre, solidifying its standing as Chile's leading mid-size copper producer.

Mercuria's US$375 million facility will refinance an existing senior-secured project financing loan previously provided by a syndicate of international banks. This new financial backing from a major commodity offtaker de-risks the project's path to production and provides Pucobre with enhanced financial stability.

Sebastián Ríos, CEO of Pucobre, lauded the deal as a critical step forward. "This is a significant milestone that strengthens the El Espino project’s positioning and reinforces Pucobre’s long-term growth strategy," he stated. The innovative financing for El Espino had already garnered industry recognition, underscoring the project's robust planning and potential.

The project is a joint venture between Pucobre, holding a 76.3% stake, and Resource Capital Funds (RCF), which holds the remaining 23.7%, bringing a mix of local operational expertise and international investment backing to the venture.

Navigating the Global Copper Crunch

The deal is set against the backdrop of a looming global copper shortage. Market analyses project a significant supply deficit as demand, fueled by the green transition and the expansion of AI-driven data centers, is forecast to surge from approximately 25 million tonnes today to over 36 million tonnes by 2031. Supply, hampered by falling ore grades, underinvestment, and long project lead times, is struggling to keep pace, with forecasts pointing to a potential shortfall of over 6 million tonnes by the end of the decade.

While El Espino's annual output of 26,000 tonnes is a modest fraction of global demand, it represents a vital infusion of new supply. Every new project is critical in the global effort to avert a bottleneck that could slow the pace of decarbonization. The agreement highlights the strategic imperative for end-users and traders to secure long-term supply through direct investment and offtake agreements with producers.

In addition to copper, the project will contribute 13,000 ounces of gold annually to the market. With gold prices remaining bullish due to its role as a safe-haven asset and its use in advanced electronics, the gold by-product adds a valuable secondary revenue stream to the project's economics.

Balancing Development with Sustainability

Developing a new mine in Chile, particularly in the water-scarce Coquimbo Region, requires navigating a complex environmental and social landscape. The El Espino project, which has been in development for over a decade, secured its Environmental Qualification Resolution (RCA) after a lengthy review process that began in 2013.

Pucobre has emphasized the project's high environmental and social standards, which were key to securing international financing. A critical design feature is the mine's reliance on seawater for its industrial processes, avoiding the use of precious freshwater resources. Furthermore, the project is committed to sourcing its power from renewable energy, aligning with Chile's national decarbonization goals.

Proactive community engagement has also been a pillar of the project's strategy. Pucobre has forged collaboration agreements with the local municipalities of Illapel and Canela, committing to local employment, procurement opportunities, and specific environmental mitigation measures. As the El Espino project moves toward its 2027 production target, its success will be measured not only in tonnes of copper produced but also in its ability to deliver on these ambitious environmental and social commitments in one of the world's most vital mining jurisdictions.