Barrick Gold Corp (NYSE:GOLD) and Chilean miner Antofagasta plc have partnered to invest $95 million in exploring copper and other metals in the Alto del Carmen area of Chile's northern Atacama region.

The venture will operate under the banner of Minera El Encierro, deploying 60 drilling platforms over 35 concessions and spanning 9,400 hectares. The filing with the Chilean regulator revealed the operation will last for five years, with Antofagasta as the majority shareholder and operator.

The prospective area identified by Antofagasta is a classic copper-gold-molybdenum type porphyry, showcasing high-grade mineralization in the El Indio-Pascua belt. Only 15% of the mining property has been drilled, indicating significant untapped potential.

Barrick aims to double its copper production by 2031, with projects such as the Reko Diq mine in Pakistan and the Lumwana super pit expansion in Zambia playing pivotal roles. Furthermore, rumors resurfaced about its potential takeover of First Quantum Minerals (TSX:FM).

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Chile, while already a key player in global copper production, is looking to accelerate its copper output. President Gabriel Boric's administration aims to increase production by 1.04 million metric tons by 2026, marking a 20% rise from 2023 levels.

This ambitious target is crucial as global demand for copper surges with the growth of clean energy technologies. Cochilco Copper Commission estimates a 1% rise in national production to 5.4 million tons this year, with a 4.3% increase to 5.6 million tons expected next year.

As Chile seeks to fill the anticipated copper supply gap, challenges such as declining ore quality and water restrictions loom. Cochilco identifies a project pipeline worth nearly $74 billion from 2022 to 2031, with major players like Codelco, Anglo-American, Antofagasta, and BHP (NYSE:BHP) set to invest. Despite the optimistic projections, BloombergNEF analyst Sung Choi expressed skepticism about the feasibility of achieving the 2026 production goal.

Meanwhile, India's industrialization efforts are adding further pressure on copper supply. Adani Group subsidiary Kutch Copper plans to launch a copper processing facility in March, with an initial capacity of 500,000 tons per year, boosting India's copper production by 80% and bringing its copper concentrate imports to 2 million tons in 2024.

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