Peru Seen Consolidating World Number Two Position In Copper
April 9, 2010 - A number of major mining companies have projects underway and observers are confident that if the political situation remains under control, then Peru could consolidate its second place in global output.
NASDAQ.com, by Robert Kozak, Of DOW JONES NEWSWIRES
SANTIAGO -(Dow Jones)- Peru has a long
way to go before catching world leader
Chile in copper production, even as
production is set to increase
Peru in the next few years.
A number of major mining companies have
projects underway and observers are
confident that if the political
situation remains under control, then
Peru could consolidate its second place
in global output.
"I think that things are looking good.
Peru has become the second biggest
copper producer in the world and with
the new mines this position will be
consolidated," Southern Copper Corp.
(SCCO) Chief Executive Oscar Gonzalez
Rocha said on the sidelines of the CRU/Cesco
Peru had output of about 1.3 million
tons of copper last year, while Chile
produced 5.4 million tons.
Southern Copper, which expects to
produce about 350,000 tons of copper
this year in Peru, has a project
underway to add another 120,000 a year
from the Tia Maria deposit. Expansions
at the Toquepala and Cuajone mines could
add significantly more tons, the company
Colorado School of Mines economist John
Tilton said Peru needs to ensure it has
a stable investment environment in order
to continue to attract investors.
General elections are set for next year
and the top candidates in opinion polls
could all be considered to be market and
"The real long term issue is ensuring
that there is a stable political
situation and if they have that there
will be a very bright future for mining
in Peru," Tilton said in an interview.
Meanwhile, Freeport McMoRan Copper and
Gold Inc. (FCX) is looking closely at
expanding at its Sociedad Minera Cerro
Verde SAA copper mine,
while the consortium that runs the
Antamina polymetallic mine has committed
to spending $1.3 billion to expand mine
Among the largest greenfield projects
underway are two being undertaken by
Xstrata Copper. (XTA.LN) That company's
chief of copper, Charlie Sartain, was
highly optimistic at the CRU/Cesco
copper conference this week.
He said the company's $4.2 billion Las
Bambas project is expected to produce an
average of 300,000 tons of copper per
year for the life of the mine, with
output of about 400,000 tons a year for
the first nine years.
The company's $1.4 billion Antapaccay
project could be commissioned by mid-
2012 and is expected to produce an
average of 160,000 tons a year of copper
for at least 20 years.
Two other projects are also receiving a
lot of attention.
Anglo American's (AAUK) Quellaveco
project is expected to eventually
produce about 220,000 tons of copper
annually. Construction there is expected
to start next year and could be in full
production by 2015, company officials
Owned by the Aluminum Corp. of China,
(ACH, 2600.HK) or Chinalco, the $2.2
billion Toromocho project in the central
Andes Mountain region is expected to
produce some 250,000 tons of the red
metal by 2012.
Veteran explorer David Lowell, who
helped discover that deposit, said this
week that Toromocho has the potential to
become the largest copper mine in Peru.
Meanwhile, there are a large number of
other projects on the drawing board,
including Rio Tinto's (RIO.AU) La Granja
deposit in northern Peru, which could
eventually become a major producer.