Mining investment up 77 percent in Peru

March 13, 2012

Investment in mining in Peru soared 77 percent higher than the year prior with companies putting $7.2 billion into the industry, the Peru government said.

The Mines and Energy Ministry of Peru said that mining companies invested $1.39 billion on infrastructure, $1.12 billion on processing plant equipment and $853 million on production, Dow Jones Newswires reported.

Companies also spent $849 million on exploration, $787 million on preparation activities last year and a little more than $700 million on mining equipment, the ministry said. It categorized $1.42 billion as “other.”

Gold producer Minera Yanacocha invested $1.15 billion in 2011, nearly quadruple the prior year, the ministry said. Yanacocha, majority held by Newmont Mining Corp., operates South America's largest gold mine and owns the Minas Conga project, Peru’s biggest mining development requiring an investment of up to $4.8 billion.

The ministry said that Xstrata PLC invested $763 million last year in its Las Bambas project and $668 million in its Tintaya project, both located in southern Peru.

Minera Chinalco Peru SA’s investments totaled $750 million in 2011, while Compania Minera Antamina had investments of $640 million.

Peru is the world’s second biggest producer of copper and silver and a major producer of gold, zinc, lead and other minerals. Mining companies plan to invest about $50 billion in new mines and expansion projects this decade, according to the ministry.

Other projects include an expansion by Sociedad Minera Cerro Verde SAA and Minsur SA's Pucamarca gold mine.

Cerro Verde plans to invest $4 billion to triple throughput at its mine located in the Arequipa region. The company said recently that it was not expecting opposition from local communities, which has been a major challenge for other mining projects in the Andean country.
However, authorities in the district of Hunter, located near Cerro Verde's mine, said they plan to oppose the expansion over environmental concerns, newspaper La Republica reported.

Meanwhile, Minsur, which is Peru’s only tin producer, plans to invest $120 million in Pucamarca. Minsur aims to complete construction in June and start operations in the second half of this year, newspaper El Comercio reported.

Minsur says Pucamarca will produce 75,000 oz/year.



Related article search: