Six mining projects will begin construction next year in Peru and another two will follow in 2021.
With combined investment of US$7.3bn, the projects are seen as essential to revive the country’s economy amid an institutional crisis and much political uncertainty.
According to the latest data from the energy and mining ministry (Minem), investments of US$3.93bn are expected next year with the construction of four brownfield projects, namely the optimization of Inmaculada, the expansion of Pachapaqui, and the integration of Coroccohuayco and Yanacocha Sulfuros, as well as greenfield projects Corani and San Gabriel.
In 2021, construction of the Pampa del Pongo and Zafranal projects in Arequipa region is expected to start with combined investment of US$3.35bn.
The US$110mn Santa María expansion project, which is operated by Compañía Minera Poderosa in La Libertad region, began construction this year, according to Minem.
Tailings B2 San Rafael (US$209mn) and Mina Justa (US$1.6bn), both belonging to Minsur, are also under construction, as is the US$300mn Quecher Mainof Yanacocha.
At the execution stage is Anglo American’s Quellaveco (US$5.3bn) project and the US$1.35bn expansion of Toromocho, which belongs to Chinalco.
“It’s noteworthy that the joint investment at this stage is US$8.9bn, representing 28% of the total portfolio,” Minem said.
According to analysts, the political crisis generated by the confrontation of the government of President Martín Vizcarra and the opposition-controlled congress – which erupted when Vizcarra tried to dissolve congress – is not likely to impact investments in mining projects that are under construction nor those that are set for execution in 2020 and 2021.
“There should be no major problem,” Hugo Perea, BBVA Research’s chief economist for Peru, told BNamericas. “The mines that are under construction are going at the rate they had planned.”
“More than the local political noise, it will depend on the evolution of prices, world demand, whether China slows down or not,” Perea said about the projects that will begin construction in 2020 and 2021. “In principle, the investments are programmed and we will consider them in our projections, in an environment where metal prices do not suffer a drastic fall.”
According to the latest newsletter from Minem, the main projects that will begin construction during 2020-21 are the following:
Inmaculada Optimization (US$136mn)
Hochschild’s Inmaculada gold and silver project is in Ayacucho region. Its local subsidiary Ares operates a program to explore mining and brownfield sites at its own mines and surroundings.
The project is at the feasibility stage and could start operations in 2021. Thanks to the program, the company extended the life of Inmaculada by 10 years after the discovery of 17 veins.
Coroccohuayco integration (US$590mn)
The copper project is an extension of Glencore’s Antapaccay mine and is at the stage of studying feasibility and socialization with nearby communities.
It is expected to start operations in 2022 and could produce around 100,000t/y of copper.
Pachapaqui expansion (US$117mn)
ICM Pachapaqui plans to expand production of the underground zinc, copper and lead mine and associated plant from 800t/d to 3,300t/d of ore. It is currently at the feasibility stage with implementation slated for 2023.
Corani project (US$585mn)
The silver project of Canada’s Bear Creek is located in Puno region and is currently at the engineering stage after having received approval for its environmental impact study.
Bear Creek expects to secure financing for the project this year and begin construction in 1H20.
San Gabriel (US$430mn)
Buenaventura plans to submit the project for board approval around mid-2020. Currently at the prefeasibility stage, San Gabriel is located in Moquegua region and could start operations in 2023.
With an estimated contribution of 100,000oz/y of gold, the project would compensate for lower expected production at the La Zanja mine and reductions linked to the centralization and restructuring process at Orcopampa.
Yanacocha Sulfuros (US$2.1bn)
The copper and gold project belonging to Newmont Goldcorp, Buenaventura and Sumitomo is located in Cajamarca region.
Focused on extending the life of Yanacocha, the project is at the feasibility stage and obtained environmental study approval in March. According to Minem, it could start operations in 2023.