Big boys eyeing up Las Bambas

Some large mining companies are interested in developing the Las Bambas copper project in south-central Peru's Apurimac department, the country's mining minister Hans Flury told BNamericas. "Some people have said that Las Bambas is a second Antamina, so we are looking at a large investment," Flury said Tuesday, speaking on the sidelines of 26th Peruvian Mining Convention in the southern city of Arequipa. Peru's authorities opened the privatization process for Las Bambas in August, inviting interested companies to apply to be short-listed for the project. Lima has estimated that investment of US$2bn may be required to develop the deposit. According to Peruvian press reports, Phoenix-based Phelps Dodge (NYSE: PD), Southern Peru Copper (NYSE: PCU) and Anglo-Australian mining house BHP Billiton (NYSE: BHP) are all interested in the property. Flury said that the state was currently conducting exploration drilling at Las Bambas and expected to have the results before the end of the year in order to auction the project in December. "Two large companies previously carried out exploration at Las Bambas so they currently have more information. The idea of the exploration is to create a level playing field in terms of geological information about the project," the mining minister said. At an altitude of 4,400-4,650m, the Las Bambas skarn-type copper deposit has proven reserves of 40.5Mt grading 2% copper and exploration potential of more than 500Mt, according to state investment promotion agency ProInversion. Flury was speaking after signing an agreement with ProInversion president Luis Guiulfo and Apurimac regional government leader Luis Barra to work together to push development of the department, Peru's poorest, via the promotion of mining projects. "The aim is to work together to advance mining projects, in particular Las Bambas, and others that might appear, to haul Apurimac out of poverty," said Flury. Some 48% of people in Apurimac live below the poverty line, are illiterate and have no electricity, according to Flury. At the same time, ProInversion's Guiulfo also signed an agreement with deputy mining minister Cesar Polo to pool energies to slash the administrative obstacles obstructing the development of mining projects in Peru. "The main enemy of private investment in Peru is the public sector because of the bureaucratic and repetitive paperwork that needs to be done to push through a project," said Guiulfo.