By Leia Michele Toovey-Exclusive to Copper Investing News
Peru has long been known for its impressive mineral wealth. There is evidence of mining in Peru dating back thousands of years. Currently, Peru ranks third in world copper production. The country is also the top producer of silver, the second largest producer of zinc, fourth for lead and sixth for gold. Mineral exports account for a significant portion of Peru’s export revenue. As of 2009, mineral exports accounted for 61 percent of total export revenue in Peru, which produced 1,260,000 metric tonnes of copper that same year, according to the USGS.
While Peru holds vast mineral wealth, historically, its geography has made the minerals difficult to access. Many of the richest deposits are found in the central Andes in areas of high elevation and relief. On an artisanal mining scale, extraction of Peru’s resources is relatively easy; however, transitioning the mining economy from small to full-scale operations required advancements in both mining techniques and equipment. Utilizing these advancements in mining, there is potential currently to pin-point new resources, and for this reason there are many miners in the region actively exploring and developing Peru’s mineral deposits.
Peru’s government is pro-mining and open to foreign investment; however, this has not always been the case. In 1971, state mining rights were assigned to the government enterprise Minero Perú. In 1992, the government developed “The General Mining Law” which simplified the legal process for obtain mining rights, and amendments in 1996 guaranteed protections to mining ventures and contracts. These laws have ensured more favorable exploration and production contract terms for investors. Within the framework of four 1990s laws promoting investment in mining and natural resources, and dealing with foreign and private investment, more than 250 domestic “Stability and Guarantee” contracts have been signed since 1993. As of 2001, the government had privatized 90 percent of its mining assets. Now, the government plays a limited role as an overseer of the the country’s mining industry.
Example of a world class mine: Antamina
Antamina is one of the largest producers of copper and zinc in Peru, and one of the ten largest mines in the world in terms of operating volume. Antamina’s ore deposits are a skarn-type and host copper, zinc, silver, molybdenum and bismuth. As of January 2010, according to Minera Anatmina’s website, the mine lifespan was for another 16 years, until 2026. In July 2008 it was estimated that the Antamina deposit had 745 million tons of minable reserves with 1.06% copper, 0.67% zinc, 11.7g / t gold and 0.026% molybdenum. The mine turns out impressive volumes, and for this it is consistently placed within the top ten for mines with the most volume output. The average capacity of material removed is 430,000 tonnes per day, and the mine operates 24 hours a day, 365 days a year. Investment in Antamina (an initial investment of approximately U.S. $2.3 billion, plus U.S. $1.2 billion of investment in the expansion of its operations) is the highest in the history of Peruvian mining. Compania Minera Antamina SA is a company incorporated under Peruvian law, the product of a joint venture between four leading companies in the world mining industry: BHP Billiton, Xstrata, Teck Resources, and Mitsubushi Corporation.
Juniors
Candente Copper Corp (TSE:DNT)
Holds zinc and copper assets in Peru, including Cañariaco Norte copper deposit and the Cañariaco Sur and Quebrada Verde.
Viper Gold (CVE:VPR)
Viper Gold Ltd is a new company focused on the silver-gold potential of the “Gold Corridor” in Northern Peru. Their primary interest is the Corongo Property.
Sunset Cove Mining Inc. (CVE:SSM)
Their Peruvian interests are the Carolay copper-gold deposit and the Azulcuna copper deposit.
Miners and Explorers
HudBay Minerals (TSE:HBM)
In early 2011, HudBay acquired Norsemont Mining Inc. and its wholly-owned Constancia copper porphyry project located in Southern Peru. The Constancia project is located approximately 100 kilometers south of Cusco, Peru. It is situated on the eastern side of the Andahuaylas-Yauri copper belt, approximately three kilometers from the Katanga mine, a copper-gold mine that operated from the early 1900s up until the 1990s.
Southern Copper (NYSE:SCCO)
SCC is one of the largest integrated copper producers in the world. They produce copper, molybdenum, zinc, lead, coal and silver. All of our mining, smelting and refining facilities are located in Peru and Mexico. Southern Copper conducts exploration activities in Peru, Mexico and Chile.
Freeport McMoRan Copper and Gold Inc. (NYSE:FCX)
Has an interest in Peru through the Cerro Verde project.
Anglo American (LON:AAL)
Holds interests in Peru including the Quellaveco and Michiquillay projects.
A shareholder in Antamina.
Has an interest in Peru, through the Las Bamblas copper project. Also a shareholder in Antamina.
BHP Billiton (NYSE:BHP)
A shareholder in Antamina.
