Peru to double copper production within five years - minister

Peru aims to double copper production to 2 million tpy within five years, energy and mining minister Juan Valdivia told MB. This goal is made feasible by projects such as Xstrata Copper`s Las Bambas and Anglo American`s Michiquillay copper-gold-silver project in Cajamarca, he told MB on the sidelines of the opening of Milpo`s Cerro Lindo copper, lead and zinc mine in Ica. "Within five years it is very possible that we can double copper production," he said.

Peru produced 1.05 million fine tonnes of copper in 2006, a 3.9-percent increase compared with the 1.01 million fine tonnes produced in 2005.

The country`s president Alan Garcia had earlier said there was no reason Peru should not be as big a copper producer as its southern neighbour Chile, and said development of the mining industry is essential for the Andean country.

"Twenty percent of the world`s mineral resources are in Peru but only 10 percent of the country has been explored. Chile has fewer mineral resources than Peru and no polymetallic resources yet it produces 5 million tpy of copper," Garcia said. Chile produced 5.6 million tonnes of fine copper in 2006.

"We can develop many more mines. We could open 200 or 300 more mines in Peru due to world growth projections. We could replace Chile. What are we afraid of?" Garcia said. Garcia added that Peru now has to move towards making refined and semi-finished products to maximise the value it obtains from its mineral resources.

"This will be expensive but it will generate three to five time the number of jobs that mining generates. We have to pass to this important second stage," he said.
Valdivia said the government will maintain political and economic conditions to attract foreign investment in the mining sector, including continuing to address the social problems that have hindered some mining projects in recent years.

"We will maintain legal stability in the country so that there are guarantees for investors, and we will continue to work towards social responsibility to re-establish a better relationship between companies, the state and the communities," he said.

"Social issues are the main challenge the mining sector faces. We have overcome the financial and technical problems, now we have to work to establish good relations," he added.

"Sooner or later Peru will develop through mining, but only when it does not represent a conflict with other sectors of the country," said Garcia.
Although only 10 percent of the country has been explored, the government is not going to fund basic geological exploration, he added.

"That is something for the private sector," Garcia said. Valdivia said the ministry estimates that miners in Peru will pay royalties of 600 million soles ($190 million) and possibly up to 5.4 billion soles this year.

Publication: Metal Bulletin
Provider: Metal Bulletin com
Date: July 23, 2007