Miners Focus On Peru Projects, As Minerals Rebound
September 16 2009 - 9:31PM
Dow Jones News
With mineral prices rebounding as the global economy stabilizes,
Peru is once again a hotbed of mining activity, with a number of
new projects underway that could sharply boost output.
A wide range of local and foreign companies are pouring money
into feasibility and environmental impact studies to bring
greenfield projects on line, or are planning to ask their boards to
approve expanding existing operations.
Sociedad Minera Cerro Verde SAA (CVERDEC1.VL) said Wednesday it
will restart its molybdenum operations this month at its mine near
Arequipa in southern Peru, due to increased demand. The company in
January suspended those operations, which had produced three
million pounds of molybdenum in 2008, due to poor market
conditions.
Compania Minera Antamina SA said at a conference being held in
this southern Peruvian city that it is planning to begin work in
the first half of next year on an expansion that will increase the
life of that giant base metals mine by at least seven years.
Chief Executive Ian Kilgour said they are in the detailed
engineering stage now and that new processing mills "should be
operating by the second half of 2011," pending shareholder
approval.
That mine is a joint venture between BHP Billiton Ltd. (BHP),
with 33.75%, Xstrata PLC (XTA.LN), with 33.75%, Teck Resources Ltd.
(TCK) with 22.5% and Mitsubishi Corp. (8058.TO) with 10%. Antamina
produced 198,111 metric tons of copper and 268,877 tons of zinc in
the first seven months of the year.
Another big producer, Southern Copper Corp., (PCU) also has a
number of projects on the drawing board, including an expansion at
its Toquepala mine and copper and molybdenum concentrators, as well
as an expansion at its Ilo smelter and refinery.
Southern Copper Chief Executive Oscar Gonzales told reporters
that he expects the government to grant it the required permits by
October to move ahead with its Tia Maria mine project. The company
aims to bring Tia Maria into production in mid-2011, and to produce
120,000 tons annually of the red metal there.
Gerald Wolfe, chief executive of Chinalco (ACH) subsidiary
Minera Chinalco Peru SA, told reporters that the company is
planning to present its environmental impact study for the
Toromocho copper mine in central Peru in coming days. That $2.2
billion project is scheduled to begin production in 2012, with an
estimated planned capacity of copper metal of 250,000 tons per
year.
Xstrata PLC's board of directors, meanwhile, will vote next year
on a $5.1 billion investment in two mining projects in Peru, the
company's chief operating officer for southern Peru, Jose Marun,
said in a presentation Wednesday.
Xstrata estimates an investment of $3.8 billion for the Las
Bambas copper project in Peru's southern Andes, which the company
has said has "progressively been developed into a major copper
project to construct a 300,000 tonne per annum open pit
operation."
A feasibility study for the project is expected by the end of
the year.
An additional $1.3 billion is seen needed by Xstrata to develop
the Antapaccay mine in Peru, and the company will present an
environmental impact study by the close of 2009, Marun said.
Construction is expected to begin in the fourth quarter of 2010 and
conclude in 2012.
Various smaller miners are also moving forward with
projects.
Miner Compania Minera Milpo SAA (MILPOC1.VL) expects to finish a
feasibility study for its $300 million base metals Hilarion project
by the end of the year, company General Manager Abraham Chahuan
said.
Peru is the world's largest producer of silver, and a major
producer of gold, copper, zinc and other metals.
-By Leslie Josephs and Robert Kozak, Dow Jones Newswires;
511-99927 7269; peru@dowjones.com