MMG due to start pre-extraction at Las Bambas

A consortium led by MMG is on track to begin pre-extraction activities at the US$7bn Las Bambas copper-molybdenum project in Peru this quarter, local investment bank Credicorp Capital said.

China Minmetals unit MMG acquired the project from Glencore for US$5.85bn last year and will start operations at Ferrobamba, one of four deposits at the Apurímac region operation, and produce the first concentrates in the first quarter of 2016, according to Credicorp.

MMG, which began an exploration campaign at Las Bambas last month to confirm resources, said the mine was 80% complete through end-year, the bank reported.

Last week's plunge in copper prices to a five-year low due to a supply glut and weakening demand will not discourage the company from completing the project on schedule, MMG CEO Andrew Michelmore said at a news conference. Falling crude oil prices will also help MMG slash diesel costs, he said.

"Copper will be tightening and sentiment changing in the second half of 2015," Reuters cited Michelmore as saying. "Las Bambas will be coming on to the market just when the market needs those tonnes."

Las Bambas, originally expected to cost US$5.1bn to develop, is scheduled to start producing 450,000t/y copper and 5,000t/y molybdenum next year.

The 140,000t/d capacity mine is the largest project in Peru's US$62bn mining investment portfolio over the next decade, according to the energy and mines ministry (MEM).