Escondida: The $47 Billion Question Nobody Else Is Modeling

Copper and Escondida

Concentrate is tight. Treatment charges at 1992 lows. Smelters cutting production.

Escondida — the world's largest copper mine, ~5% of global supply — faces a difficult reality. Ore grades are in steady decline, pushing costs higher. Maintaining production requires new concentrator capacity, but higher throughput accelerates reserve depletion — and the grade decay that follows.

So what will Escondida actually produce — given the geology, the processing constraints, the operational uncertainties?

A New Type of Mining Intelligence

Operator guidance doesn't give you the full picture. Neither do oversimplified forecasts with single, straight lines.

AlfaRev built a different approach: first-principles modeling — every ore body, every processing step, every operational constraint modeled from the ground up.

First principles: Model from basic building blocks that correspond to reality to understand the big picture. Not from consensus. Not from guidance. Build up from there.

The Study

We applied this to Escondida — and the results challenge the single-line narrative.

BHP shows investors one path: production dips in the early 2030s, then recovers. Our model reveals what that line obscures: a $47 billion range of outcomes depending on geology, capital decisions, and market conditions.

Buildout vs. Sunset: The new Los Colorados concentrator is pre-FID. If BHP builds it, production recovers. If not, the dip becomes permanent decline. Ten-year EBITDA gap: $6 billion. By 2040: $2-3 billion annually.

The real value driver: Concentrator production swings EBITDA by $31 billion over ten years. Cathode from Full SaL leaching? $4 billion. The headline technology is economically marginal — at least with today's reserves and technology.

The supply gap: 200 kt of annual production at risk — in a market already starved for concentrate.

Full Study

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About AlfaRev

Mining intelligence needs to keep up with new levels of uncertainty and short-term supply shocks. That's the gap AlfaRev was built to fill.

Founded by Johannes Holdø and Maximilian Schuberth — both with over ten years of experience in forecasting resources, assets, and markets in the energy space — AlfaRev applies their skillset to mining and processing.

Escondida is our first public study — a demonstration of the toolkit. The methodology is transparent. Every assumption exposed.

If you're making investment, trading, or supply decisions in this market, let's talk.