Nexa in talks to sell US$655mn Peru copper project

Nexa Resources is in talks to sell the Pukaqaqa copper project, an initiative valued at US$655mn, in Peru’s Huancavelica region.

The company, which is part of Brazil’s Votorantim group, told the local securities regulator (SMV) there are “ongoing negotiations linked to a possible sale of the Pukaqaqa mining project.” 

Although Nexa has not given details about the talks or potential buyers, the Pukaqaqa project, at an altitude of over 4,000m, is one of various the mining company has in its portfolio but without a start date for construction.

According to the energy and mines ministry (Minem), Pukaqaqa is a greenfield project in the prefeasibility stage valued at US$655mn. It has a useful life of 17 years and is expected to produce 5,000t/y copper, a Minem report shows. Total resources are put at 309Mt grading 0.4% copper.

The project has its environmental management instrument (IGA) approved, and in 2022 Nexa invested US$365,000 in infrastructure maintenance. However, the company did not present a mining plan nor specify a date to begin production.

According to local media, Pukaqaqa faces social issues. NGO CooperAcción says community leaders in Huancavelica have spoken out – on more than one occasion – against the project, claiming it puts access to and quality of water at risk. In 2021, local residents staged a march against the project, arguing that more than 50,000 people would be harmed.

According to the NGO, more than 40% of the territory of Huancavelica is concessioned to mining companies, which has generated opposition to the industry in what is the fifth poorest region in Peru.

PORTFOLIO

According to the Minem mining investment report, Nexa has the following development projects apart from Pukaqaqa:

• Cañón Florida zinc project (US$214mn) in Amazonas region
• Hilarión zinc project (US$585mn) in Áncash region
• Magistral copper project (US$493mn) in Áncash
• Shalipayco zinc project (US$91mn) in Junín region

Of these initiatives, Magistral was the closest to starting construction but environmental review agency Senace rejected modifications to the project’s environmental impact study. As a result, startup is delayed by at least four years since the company has to produce a new study.

Nexa also has a portfolio of 10 exploration projects in Peru totaling US$56.9mn. Of these, Pucasalla (US$8.6mn) and Los Perdidos II (US$6.8mn) are the most advanced, and already have authorization for drilling. The figures are in a separate Minem report.