MMG’s Las Bambas copper mine in Peru, one of the world’s biggest mines of the red metal, is on track to begin production in the first quarter of 2016, despite weak prices and relentless protests against the project that left four dead and 16 seriously injured last month.
Melbourne-based and Hong Kong-listed MMG, which acquired the $7.4 billion copper-silver-molybdenum mine from Glencore (LON:GLEN) in August 2014, said it has already completed the installation of conveyor belts, while all four electric shovels and 38 trucks are operational.
A shipment of 600 concentrate transport containers were dispatched from China and 80 rail wagons are ready for shipping, MMG said, adding that it expects to spend a total $1.9-2.4 billion this year at the project.
“While we have some challenges ahead yet, the Las Bambas team is to be congratulated for their commitment to deliver this flagship project on schedule and within budget,” MMG CEO Andrew Michelmore said in a statement.
Las Bambas is set to deliver 400,000 tonnes of copper per year during the first five years of production placing it within the top three copper mines globally.
The mine, located at 4,000 metres in the south of the South American country, will also produce significant amounts of silver, gold and molybdenum over its 20-year mine life. Las Bambas boasts 6.9 million tonnes of copper reserves and a 10.5 million tonne resource.
$21bn investment delayed
Peru has been the favoured destination for copper investment in recent years.
New mines coming on stream in the country in the following months and 2016 will double production to 2.8 million tonnes, placing the country in second place globally behind Chile.
According to data from the Peruvian Institute of Economics, however, social conflicts and red tape are making that goal difficult, as they have already caused the delay of $21.5 billion worth of mining projects in recent years.
Meanwhile the Apurimac region, near the Las Bambas Project, continues to be under martial law following last month unrest. During such period, civil liberties including freedom of association and movement are restricted, while police are allowed to enter houses without search warrants.
Mining accounts for 12% of Peru’s GDP and 60% of its export earnings.
MMG, which also has operations in Canada, Australia, Africa and Laos, plans to produce 174,000-189,000 tonnes of copper and 440,000-510,000 tonnes of zinc this year despite closing its Century zinc mine, in Australia.