Peruvian Mining

Already a major producer in precious and base metals, Peru is capitalizing on its mining friendly environment to treble copper production over the next coming years.

A REPORT BY GBR FOR E&MJ

Link: Peruvian Mining

Source: Global Business Reports

Keeping low 'profile' helps Canadian miner gain approval in Peru

Hudbay Minerals has begun building its $1.5-billion Constancia copper mine in southern Peru after keeping a low profile to win crucial support from local communities, company President David Garofalo said.

The groundbreaking ceremony on Wednesday, in which Garofalo participated along with local leaders, came a week after Peru shelved Newmont Mining's $5-billion gold mine in the northern Cajamarca region due to intractable opposition.

"We stayed focused on the people that are affected and tried not to create too much of a profile for us across Peru," Garofalo told reporters late on Wednesday. "Because outsiders and interlopers get involved and they can disrupt our engagement with communities."

Opponents of mining projects like Newmont's say they want to protect important local water resources and prevent pollution, but mining advocates say local concerns have been hijacked by politically ambitious ideologues who polarise negotiations.

Production at Constancia is slated to start in 2014, with full production seen by the second quarter of 2015. Hudbay plans to roughly triple the size of its copper output over the next four years to 125 000 t/y, largely on the back of production from Constancia.

Peru faces more than 200 pending social conflicts, many related to mining projects, and President Ollanta Humala has replaced two prime ministers during his one-year administration after protests against mining turned violent.

"Even as issues were flaring up in Cajamarca, we got our beneficiation concession," he said, referring to a construction permit granted in June. "The regulatory process in Peru still works."

In July, five people died in demonstrations against Newmont's proposed mine in Cajamarca, and in May two were killed in clashes with police in the southern province of Espinar, some 70 km from Hudbay's Constancia project.

Garofalo said this neighboring protest movement at Xstrata's copper mine, Tintaya, has left Hudbay's development "largely untouched."

"We've had - knock on wood - harmonious relationships."

Hudbay agreed to labor guarantees and has already employed 1,000 locals from the 2,500 who live in the two nearby communities in the district of Chumbivilcas, Garofalo said.

The company is also paying for the relocation of 36 families that live within the 22,500 hectare concession to new homes, and has agreed to invest in roads, sewage systems, schools and health clinics.

Silver Wheaton will fund $750-million of the Constancia project in Peru in exchange for a share of the precious metals produced there and at another Hudbay mine.

Hudbay announced a second-quarter loss earlier this month, due to an impairment charge and decreased sales.

Garofalo said Hudbay hopes Constancia will replicate the successes of its mining complex in the Canadian province of Manitoba. Hudbay's Lalor mine in Manitoba pulled up its first ore two weeks ago, and the nearby Reed project will begin production next year.

He said Hudbay will probably focus future investments in coming years in Canada and Peru.

"Ninety-nine percent of mining goes on quietly and unfettered in Peru," he said.

Source: Reuters

Peru Mining - Project Profiles

Name	Project Type	Investment	Startup date	Project stage	Capacity / Output
Alicia		Other		Exploration
Antamina Expansión		US$1bn - US$3bn		Construction
Antapaccay Expansión Tintaya	Zinc	US$1bn - US$3bn	2012	Construction	215,000 Zinc t/y tons per year
Azulcocha	Copper	Other	2013	Construction	160,000 Copper t/y tons per year
Bayóvar (En Operación)		US$500mn - US$1000mn		Operation
Cañariaco Norte	Phosphates	US$1bn - US$3bn	2010	Feasibility Study	4 Phosphates Mt/y million tons per year
Cerro Ccopane	Silver	US$1bn - US$3bn	2015	Exploration	911,000 Silver oz/y ounces per year
Cerro Verde - Proyecto plataforma de lixiviación 4B (En Operación)		US$0mn - US$70mn		Operation
Chucapaca	Copper	US$500mn - US$1000mn	2010	Pre-feasibility Study	30 Copper Mt/y million tons per year
Cobrecon	Gold	Other	2015	Exploration	500,000 Gold oz/y ounces per year
Constancia		US$1bn - US$3bn		Feasibility Study Update
Corani	Silver	US$500mn - US$1000mn	2014	Feasibility Study	2 Silver oz/y ounces per year
Crucero	Silver	Other	2015	Exploration	15 Silver Moz/y million ounces per year
Esquilache		Other		Exploration
Etapa de Sulfuros de La Arena		US$100mn - US$500mn		Feasibility Study
Expansión Cerro Verde	Molybdenum	US$3bn - US$5bn	2016	Environmental Impact Study (EIS)	17 Molybdenum Mlb/y Million pounds per year
Haquira	Molybdenum	US$1bn - US$3bn	2016	Exploration	17 Molybdenum Mlb/y Million pounds per year
Hierro Apurímac	Copper	US$1bn - US$3bn	2013	Advanced Exploration	230,000 Copper t/y tons per year
Hilarión	Iron	US$100mn - US$500mn		Pre-feasibility Study	20 Iron Mt/y million tons per year
Inmaculada		US$100mn - US$500mn		Feasibility Study
La Granja	Silver	US$3bn - US$5bn	2013	Pre-feasibility Study	12 Silver Moz/y million ounces per year
La Zanja (En Operación)	Copper	US$0mn - US$70mn	2016	Operation	300,000 Copper t/y tons per year
Las Bambas	Silver	US$3bn - US$5bn	2009	Installation License Approved	200,000 Silver oz/y ounces per year
Los Calatos	Copper	US$1bn - US$3bn	2014	Exploration	400,000 Copper t/y tons per year
Los Chancas		US$1bn - US$3bn		Feasibility Study
Magistral	Copper	US$100mn - US$500mn	2013	Tender Awarded	53,000 Copper t/y tons per year
Marcona Expansión	Molybdenum	US$1bn - US$3bn	2012	Detail Engineering	2,860 Molybdenum t/y tons per year
Michiquillay	Iron	US$500mn - US$1000mn	2012	Social and Environmental Impact Assessment (SEIA)	10 Iron Mt/y million tons per year
Mina Justa	Copper	US$500mn - US$1000mn	2016	Tender	155,000 Copper t/y tons per year
Minas Conga	Copper	US$3bn - US$5bn	2013	Suspended	110,000 Copper t/y tons per year
Ollachea	Gold	US$100mn - US$500mn	2014	Financial Assessment Study	117,000 Gold oz/y ounces per year
Pampa de Pongo	Gold	US$3bn - US$5bn	2014	Exploration	117,000 Gold oz/y ounces per year
Pampa el Toro	Iron	Other	2015	Exploration	10 Iron Mt/y million tons per year
Pico Machay		Other		Feasibility Study
Proyecto Galeno	Gold	US$1bn - US$3bn		Environmental Impact Study (EIS)	50,000 Gold oz/y ounces per year
Proyecto Polimetálico Santander	Copper	Other	2016	Construction	144,000 Copper t/y tons per year
Pucamarca		US$70mn - US$100mn		Construction
Pucará (En Operación)	Gold	Other	2012	Operation	70,000 Gold oz/y ounces per year
Pukaqaqa		US$100mn - US$500mn		Feasibility Study
Quechua		US$500mn - US$1000mn		Environmental Impact Study (EIS)
Quellaveco	Copper	US$3bn - US$5bn	2014	Feasibility Study	76,000 Copper t/y tons per year
Río Blanco	Copper	US$1bn - US$3bn	2014	Postponed	225,000 Copper t/y tons per year
San Luis	Molybdenum	US$70mn - US$100mn	2015	Environmental Impact Assessment	1,800 Molybdenum t/y tons per year
Santa Ana	Silver	US$70mn - US$100mn		Suspended	2 Silver Moz/y million ounces per year
Shahuindo	Silver	US$70mn - US$100mn	2013	Feasibility Study	4 Silver Moz/y million ounces per year
Tajo Norte Expansion		US$100mn - US$500mn		Construction
Tantahuatay (En Operación)		US$0mn - US$70mn		Operation
Tesoro Gold	Gold	Other	2011	Exploration	100,000 Gold oz/y ounces per year
Toro Blanco		Other		Exploration
Toromocho		US$1bn - US$3bn		Construction
Tía María Expansión	Copper	US$1bn - US$3bn	2013	Environmental Impact Assessment	1 Copper Mt/y million tons per year
Urumalqui	Copper	Other	2015	Exploration	120,000 Copper t/y tons per year
Yanque		US$500mn - US$1000mn		Pre-feasibility Study
Zafranal		Other		Exploration