Mining giant BHP.U will launch a $10.8 billion investment plan in Chile to transform an old copper plant, the Escondida plant. BHP.US said on Tuesday that it will soon enter a project to upgrade the plant's environmental treatment, which costs more than $2 billion.

The world's most valuable mining company is struggling with ore quality. While BHP.US's overall investment plan in Chile over the next decade is nothing new, the comprehensive transformation of the Escondida plant is the first step in the plan.

The scale of spending required to keep BHP.US's copper production in Chile from falling shows how difficult it will be to meet the growing demand for copper during the energy transition and data center boom. According to a report at the end of last year, BHP.US's projects in Chile also include a brand new plant in Escondida, which may cost between $4.4 billion and $5.9 billion. The projects will allow BHP.US to produce about 1.4 million tonnes of copper a year in Chile over the next decade, compared with about 900,000 tonnes without the investments.