Peru posts record copper, molybdenum output in 2016

Peru's miners boosted copper and molybdenum production to record levels in 2016 on the back of new mines and expansions, while zinc, lead and tin declined, the government said.

Copper output jumped 38.4% to 2.35Mt last year from 1.7Mt in 2015 as higher output at Freeport-McMoRan's Cerro Verde mine, Chinalco's Toromocho and Hudbay Minerals' Constancia deposit combined with the start-up of China Minmetals' US$8.3bn Las Bambas mine, the energy and mines ministry said in a statement. Molybdenum rose 27.8% to 25,757t.

Cerro Verde produced 522,134t of copper last year, followed by Antamina (443,265t), Las Bambas (329,368t), Southern Copper (312,859t), Antapaccay (221,399t), Toromocho (168,376t) and Constancia (133,439t), the ministry said. Operations at both Las Bambas and Constancia were affected by community protests in 2016.

Gold production climbed 4.2% to 153,006kg from 146,823kg as Hochschild Mining and Tahoe Resources ramped up output at new projects, the ministry said. Silver output gained 6.7% to 4.37Mkg from 4.1Mkg.

Iron ore gained 4.7% to 7.66Mt at Peru's only producer Shougang Hierro Perú, the ministry said.

Zinc fell 5.9% to 1.34Mt, while lead slid 0.4% to 314,174t. Tin output at Minsur, the country's sole producer, declined 3.7% to 18,789t, the ministry said.

Cadmium production at Votorantim Metais' Cajamarquilla refinery gained 8.3% to 820t, while tungsten output halted at the Pasto Bueno mine, the ministry said.

Minerals account for about 60% of the country's total exports. Peru, the world's third largest copper, zinc and tin producer and No. 5 in gold, aims to boost annual copper output to 2.7Mt/y by 2018.

The mining industry is expected to experience slower growth this year as major investment projects are completed, according to Lima-based brokerage Inteligo SAB. Mining contributed 8.6% to GDP growth in December compared with 20% the previous month.

"Growth in December was less concentrated in mining activity and supported by a surprising rebound of the manufacturing sector. This expansion was driven by the increase in fishing-related activity and a strong growth in capital goods production, hinting a positive outlook for investments," Inteligo analyst Luis Eduardo Falen wrote in a report. "The December reading provided a snapshot of the GDP growth dynamics for 2017: a lower contribution from mining production, an important recovery of the fishing sector and the acceleration of domestic demand. We expect a recovery driven by increasing public works in 2017."