Spotlight: Peru copper projects expected to start operations in the coming years

Peru’s copper production could exceed 3Mt/y with the launch of new projects and expansions. There are five copper projects involving an estimated US$5.2bn that are expected to start operations by the end of 2028, and there are four others that could also do so but their status is more uncertain.

Peru is the world’s second largest copper producer after Chile, with output of around 2.5Mt/y since 2016. That stagnation is set to end this year with the Quellaveco mine’s full year of production expected to increase the total to 2.88Mt, although grades of several deposits continue to decline.

BNamericas reviews the pipeline of projects.

GOOD PROSPECTS

1. NEW ILO SMELTER/REFINERY

Construction of Southern Copper’s new smelter/refinery in Moquegua region seeks to expand the capacity of the current plant that processes 1.2Mt/y. With the new US$1.3bn plant an additional 1Mt/y will be able to be processed.

In mid-May, Southern Copper said it will invest US$22.5mn this year in the project, which is still in the feasibility study stage, and construction would start in 2024. Work is expected to conclude at the end of 2025.

2. TOROMOCHO EXPANSION (PHASE 2)

After receiving the pending construction permit, the second phase of the Toromocho mine expansion can finally begin this year.

According to the mines and energy ministry, the second part of Chinalco’s project will require US$814mn, and is expected to begin operating in 2024.

The expansion will increase processing capacity from 140,000t/d to 170,000t/d at the mine in Junín region.

3. ZAFRANAL

The US$1.47bn Zafranal copper project in Arequipa region is on track to start up in the medium term. Construction is due to begin in 2025 and production in 2028.

Mario Baeza, general manager of operator Minera Zafranal, told BNamericas that the company is updating capital and operating costs of the project. It has not yet chosen a firm to do the detailed engineering but expects to do so before year-end.

Once commissioned, Zafranal will produce 76,000t of copper and 29,000oz of gold per year

4. ROMINA

Operator Minera Chungar, a subsidiary of Volcan, postponed the start of construction of the polymetallic project from this year to next. The US$150mn undertaking will produce mainly zinc and lead but also some copper.

The approval of the detailed environmental impact study is pending and production is expected to begin at the end of 2026.

5. TÍA MARÍA

Although the Southern Copper project has been halted for many years, it appears that the US$1.48bn initiative will move ahead in the short term. CFO Raúl Jacob said construction would begin late 2023 or early 2024 if dialogue with the communities moves forward. Until now, an official agreement has not been signed, but the company already has all the necessary permits to launch the project in Arequipa region.

According to a mining sector executive, construction of Tía María will take around two years but given that it is now proposed to build a reservoir to solve the problem of water stress and ease community concerns, the deadlines may be extended.

The source told BNamericas that Southern Copper will have to propose a social agreement with the Tambo Valley authorities and hold dialogue similar to what Anglo American did to move Quellaveco forward. Once Tía María is commissioned, it will produce 120,000t/y of copper.

UNCERTAIN FUTURE

1. YANACOCHA SULFIDES

The Yanacocha sulfides project in Cajamarca region is one of the most anticipated in the mining sector, and at the same time one of the most uncertain. A final investment decision by US-based Newmont for the gold- copper project is on hold. If resumed, construction could begin in 2024 or 2025, and production towards the end of 2027.

According to the BNamericas project database, Yanacocha sulfides is a US$2.5bn project which after ramping up will produce over 500,000t/y copper and 525,000oz/y gold.

2. MAGISTRAL

Construction of the Nexa Resources copper project was going to begin this year but the investment decision was postponed, according to the ministry. A ministry report states that operations were expected to start in 2026 but now the dates are “to be defined.”

Magistral is a polymetallic project in Áncash region requiring expected capex of US$493mn to produce around 55,000t/y of copper.

3. GALENO

A high potential but currently suspended project is Lumina Copper 's Galeno. Located in Cajamarca region, capex is put at US$3.5bn to produce around 144,000t of copper, 2Moz of silver, and 82,000oz of gold a year, according to the BNamericas project database.

Although there is no defined start date, the project could begin operations towards the end of 2027.

4. RÍO SECO REFINERY

Another project on hold is Buenaventura’s Río Seco refinery in Lima region. The US$410mn project aims to reduce the levels of arsenic from Buenaventura-owned polymetallic miner El Brocal and already has the EIS approved, according to the ministry.

At the beginning of May, a Buenaventura official told BNamericas that the project is on standby. Construction had been scheduled to start this year and operations from the end of 2024.