Southern Copper evaluating construction of hydroelectric plant in Peru
Southern Copper Corp. (NYSE:SCCO) is evaluating the construction of a hydroelectric plant in Peru to mitigate the impacts that the energy crisis in the second world producer of copper may have in its operations, said the company’s president Oscar Gonzalez.
According to local financial newspaper, Gestión, Gonzales said the company’s mines located in southern Peru are currently benefiting from an electricity supply contract with Enersur, a subsidiary of the French group GDF Suez, which expires in 2017.
The paper blames the lack of investment and poor long-term planning as the main causes of the energy crisis is threatening billionaire mining projects in the number two copper producing country.
Southern Copper, the largest copper producer in Peru and Mexico, is also in talks with Ecuadorean and Argentinean investors to finance an expansion into those countries, Southern Copper’s legal subdirector, Luis Echevarria told Bloomberg on Thursday.
The miner has signed an agreement to take 70% participation in a project with miner Dos Rios to explore near Guayaquil, Ecuador, and has opened an office in Neuquen, Argentina.
The company, controlled by Grupo Mexico, hopes to boost output this year by expanding exploration activities in Argentina and through its concessions in Chile, the main copper producer in the world.
Peru needs to spend at least $1 billion a year to extend its current power network so it continues to meet a growing demand, fed mainly by the country’s avid mining industry, which is expected to bring $50 billion investment in new mines and expansion projects over the next decade.