Peru launches another new copper mine

Peru announced the kick-off of a new copper mine, its second major mining investment in six weeks.

The $1.6bn Mina Justa project, located in the southern coastal region of Ica, will produce 102,000 t/yr of copper concentrate, starting in 2020.

Minsur, part of Peru's Breca Group and the country's only tin miner, acquired Mina Justa in 2012 and sold 40pc of the project to Chile's Copec Group in April. The partners closed $900mn in financing for the project in August with a pool of nine banks. For Copec, the project marks a diversification of its business away from traditional fuel distribution across the Americas.

The mine's production cost is estimated at $1.40/pound. It is also located near a major highway and ports, reducing transportation costs and time.

Peruvian president Martin Vizcarra announced the project at a palace ceremony this morning. "It is gratifying to start the week with this news, which will improve and reactivate our economy," he said.

The Vizcarra government is betting on mining, focused on copper, to drive the economy in the coming three years. The energy and mines ministry expects $21bn in mining investment between now and 2021. Another $37bn in potential investment is spread across dozens of mining projects in preliminary stages of exploration and development.

Anglo American (60pc) and Japan's Mitsubishi (40pc) recently announced development of the 300,000 t/yr Quellaveco copper mine on the southern coast. Investment will top $5bn with production starting in 2022.

China Aluminum in June began a $1.3bn expansion of its Toromocho mine in the central highlands. Production will nearly double to 300,000 t/yr by 2020.

The first incremental copper output will come at the end of this year with the completion of a $1.2bn expansion of the Toquepala copper mine operated by Mexico's Southern Cooper. Output from the mine, which is located south of Quellaveco, will increase by nearly 70pc to 240,000 t/yr.

Southern Copper in February won a concession to develop the $2.5bn Michiquillay copper mine in northern Peru. Production will average 200,000 t/yr.

Peru is the world's second largest copper producer after Chile. Output totaled 195,583t in July, and 1.4mn t in the first seven months of the year, according to the energy and mines ministry. The country produced 2.4mn t in 2017. Minerals brought in $17bn in export earnings through July, well above half of the $28.4bn in total exports.