Glencore purchase is latest in flurry of Peru copper dealmaking

Glencore Plc bought a Peruvian mining project in the country’s third copper deal in less than two weeks as companies jostle to boost their exposure to a metal projected to be in short supply.

The Swiss commodities giant is acquiring the Quechua project in the Cusco region from Japan’s Pan Pacific Copper Co. for an undisclosed sum, it said Tuesday in a statement. Peru’s government estimates the investment required to build the mine at $1.3 billion.

That follows two other Peruvian copper deals this month. Canada’s Rio2 Ltd. is acquiring the Condestable mine from Southern Peaks Mining in a transaction valued at $241 million. Fortescue Ltd. agreed to buy the 64% it didn’t already own in Alta Copper Corp., marking the Australian firm’s first major foray beyond iron ore.

The Peruvian deal flurry is taking place at a time of near-record prices of a metal seen as critical for electrification and the energy transition. A more than 30% jump in copper prices this year is underpinned by production disruptions and the difficulties in building new mines and expanding existing operations.

Glencore is stepping up its presence in Peru as part of a plan to almost double its copper output globally. The company is betting it can navigate sporadic protests over expansion plans amid broader tensions between communities and mining in a part of Peru that’s also seen a jump in informal digging.

Companies are also showing their willingness to steer through onerous red-tape in Peru, where it can take decades to turn an exploration project into a functioning mine.

Quechua, which was left undeveloped by Pan Pacific Copper, adds another piece to a district that includes Glencore’s Antapaccay mine and the future Coroccohuayco project.

“The asset should carry greater value for Glencore, which can leverage existing infrastructure much as it plans to do with Coroccohuayco,” Bloomberg Intelligence analysts Alon Olsha and Grant Sporre wrote in a note.

Antapaccay began producing in 2012, churning out about 146,000 metric tons last year. Glencore also has a 34% stake in Peru’s giant Antamina mine, where it is partnering with BHP Group, Teck Resources Ltd. and Mitsubishi Corp.

(By James Attwood and Marcelo Rochabrun)