Xstrata plc said that the estimated cost of its 400,000t/y Las Bambas copper project in Peru would be US$5.2bn.
The estimate reconfirms its prediction in August 2012, which was a 7% increase on a previous assessment.
Xstrata is close to completing a US$33 billion deal that will see it taken over by Glencore International plc. The only remaining hurdle is approval by the Chinese regulator.
Analysts at Liberum Capital said the Las Bambas disclosure should allay any fears of a “capital expenditure blowout”.
“Nevertheless, we don’t rule out modifications to the project following the capital allocation review which we expect to follow merger completion.”
Las Bambas is now in the full construction phase having committed almost 65% of the project’s construction capital cost by the end of December 2012, Xstrata said.
It could start producing 400,000t/y of copper from 2015 for at least the first five years, it added.
“Las Bambas represents the next major stage in Xstrata Copper’s Peruvian development plans that will result in combined annual production levels [including its Antapaccay project] in the country of around 700,000t of high margin copper from 2015,” said Charlie Sartain, chief executive of Xstrata Copper.