South African mining companies are welcome and popular investors in Peru, affirms that country’s ambassador to South Africa. “South Africans are very good, in general,” says Ambassador Daúl Matute-Mejía. “They understand the need to respect the local communities, to help develop them and to protect the environment. In Peru, we’re giving more and more importance to the environment and to the local communities – we listen to them, and the South Africans work with us; it’s not a problem.”
Peru is one of the world’s major mining countries and is ranked in the top six countries in the world in terms of mineral and metal resources. The country is among the leading producers of gold, silver, bismuth, copper, lead, molybdenum, tin and zinc.
The leading wholly South African mining investor in Peru is Gold Fields Limited (GFL), which owns 98.5% of the Cerro Corona mine in the department (province) of Cajamarca, some 600 km north-north-west of Lima. (Before 2011, GFL held 80.7% of the mine.) A $750-million investment which came into operation in 2008, Cerro Corona produced 161 000 oz of gold and 38 600 t of copper during 2011. (Most Peruvian mines are bimetallic or polymetallic.) The mine currently has an expected life of 17 years and is forecast to produce, in that time, some two-million sellable ounces of gold and 423 000 sellable tons of copper.
“They have been doing a lot of work to help the local community,” reports Matute-Mejía. “Mines must have the support and agreement of the local communities around them. It’s very important.”
GFL also has a joint venture with Peruvian miner Buenaventura in southern Peru – the Chucupaca project. This is 51%-owned by the South African company. However, the $1.2-billion (total investment by both companies) project was suspended in June due to permitting omissions. Concerns about high capital and operating costs are causing the two partner companies to take another look at the project. Buenaventura has reported that a new feasibility study could be completed by the end of this year. The Peruvian miner was confident that the project would go forward – it is estimated to be an eight-million ounce resource.
GFL is reported to have at least 27 other exploration concessions in Peru. Two major and partly South African mining groups, Anglo American and BHP Billiton, also have significant projects in Peru.
Anglo American’s projects are Michiquillay and Quellaveco, both focused on copper. Quellaveco, in southern Peru, is 81.9%-held by Anglo American, and received three essential permits last year, including from the local community. Board approval to go ahead with the $3-billion project is expected this year. Once in full production, the mine could have an annual output of up to 225 000 t of copper.
Michiquillay was bought in 2007 when it was privatised by government. Anglo American is continuing to carry out geo- logical exploration drilling, with the agreement of the local communities, and the concept for the mine has been finished and is being reviewed. Michiquillay could produce 220 000 t/y of copper, with the potential for expansion to 300 000 t/y.
BHP Billiton owns 33.75% of Compãnia Minera Antamina, which operates the Antamina copper, zinc, molybdenum, silver and lead mine in southern Peru. The other shareholders are Glencore Xstrata (also 33.75%), Teck (22.5%) and Mitsubishi (10%). Currently, the mine is expected to operate until 2026 and has proven reserves of 100-million tons of copper and 42-million tons of copper-zinc. Probable reserves total 454-million tons of copper and 149-million tons of zinc. These two metals account for 86% of the mine’s revenues.
Antamina is one of the world’s biggest copper-zinc mines and produced 333 700 t of copper in 2011 and some 450 000 t last year. Production this year is also expected to be around 450 000 t of copper.
Peru is eager to attract more South African mining companies.