Southern Copper to splash $2.5 billion on Peru project

Southern Copper to splash $2.5 billion on Peru project-南方铜业公司将25亿美元投资秘鲁项目
Published on: February 21, 2018
Author: Editor

Southern Copper Corp was declared the winner on Tuesday of the Peruvian government’s first auction of the Michiquillay copper project, the first tender in nearly a decade.

According to a statement by Southern Copper, controlled by conglomerate Grupo Mexico won the tender with a proposal to transfer $400 million to the government and pay 3% royalties.

Southern Copper affirmed Peruvian investment agency Proinversión’s mineral resource estimate for Michiquillay adding that the project located in the country’s northern Cajamarca region is “indisputably a world-class mining project”.

With mineral resources of 1.15 billion tonnes (at a 0.4% cut-off) and an average copper grade of 0.63%, Southern Copper said the mine will produce 225,000 tonnes of copper per year (along with such by-products as molybdenum, gold and silver) for an initial mine life of more than 25 years, “at a very competitive cash-cost.”

The estimated capital investment hovers around $2.5 billion and Michiquillay will start production in 2025 to become one of the largest copper mines in Peru, the company said. A 225kt annual production rate would place the mine in the top 20 largest copper mines in the world.

Southern’s chief executive told Reuters in September that Michiquillay has arsenic impurities, requiring a “slightly higher” investment to clean up the area.

Southern Copper, the world’s fifth largest mining company with a $38.8 billion market value, is up 32% on the NYSE over the past year in line with a stronger copper price. Copper futures were trading higher on Wednesday at $3.20 a pound ($7,060 per tonne). Copper is flat this year after a near 30% jump in value in 2017 coming close to a four-year high in December.

Source: Mining.com

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