Southern Copper expects to invest over US$300mn in Peru project next year

Grupo México mining company Southern Copper is drawing up plans for its long-delayed Tía María copper project in southern Peru’s Arequipa region.

After resuming activities on July 1, the company expects to spend US$316mn on the project in 2025 for earthworks, labor and primary construction, among others.

“That is our current budget. However, this figure is under review and we would like to accelerate our capex expenses in Tía María,” said Southern Copper’s CFO Raúl Jacob during a results conference call. Tía María's current capex is put at US$1.4bn but will be updated by the end of the year, he said.

“We are currently revising the total capex because we want to add some facilities that were not considered in the first project, and we have to accommodate some inflation costs as well... a new road will connect the project to the Islay coast, and won’t go through the Tambo valley. This will remove some of the concerns that the farmers have about Tía María. It's a 20km road,” said Jacob. In addition, technological improvements will be included.

Tía María is an open pit project that is expected to produce 120,000t/y of copper with a useful life of 20 years. According to the latest estimates, it will begin operations in the first half of 2027.

According to Southern Copper, this year work will begin on a perimeter fence for the plants and 1,000 fog collectors to retrieve water as well as the first earthworks. In total, these will generate 370 jobs, a figure that will rise to 1,100 when construction work begins in 2025. The company expects to employ up to 9,000 workers at peak construction times.

On community opposition, Jacob said there is much greater social acceptance of the project but that there will always be groups against its development. “We are seeing that the majority of Islay the population, which is roughly speaking a little bit more than 50,000 people, has interest in the project. People are registering themselves on a website set up for job offers, and we are seeing a very positive development in that regard,” he said.

PRODUCTION

According to Southern Copper, copper production from its units in Peru and Mexico totaled 482,744t in the first half of the year, up from 450,805t a year earlier. “Production at our Peruvian operations was up 15.4% quarter-on-quarter, driven by higher ore grades in Toquepala mine. At our Mexican operations, production increased 0.7% quarter-on-quarter,” says a production report. Apart from Toquepala in Tacna region, in Peru Southern Copper has the Cuajone mine in Moquegua region and the Ilo smelter/refinery, also in Moquegua.

The company expects total copper production to reach 963,200t in 2024 driven by the good performance in Peru. However, for 2025 and 2026 Southern Copper expects the figure to fall to 921,000t and to less than 900,000t, respectively, as a result of lower grades. According to Jacob, the hope is to exceed 1Mt in 2028 with Tía María.