Anglo American approves $5 billion copper project in Peru
The Quellaveco copper project, 60% owned by Anglo American and 40% by Mitsubishi and located in Peru, was approved yesterday.
Anglo American (LON:AAL) stock was mostly unchanged at GBP1,691.40 (US$22.15) a share.
The estimated capital cost for the project ranges between $5.0 to $5.3 billion.
The company expects a post tax IRR of greater than 15% with a four-year payback and an EBITDA margin of more than 50%.
The company believes it can expand Quellaveco beyond its current 30-year reserve life as well as to increase throughput above the initial capacity of 127,500 tonnes per day.
First production of copper is expected in 2022, ramping up to full production in 2023. During the first ten years of full production Quellaveco is expected to produce approximately 300,000 tonnes per year at a cash cost of $1.05 per pound of copper.
Peru’s National Society of Mining, Petroleum, and Energy released a statement approving the project.
Written with material from Anglo American's news release.