Southern Copper’s Tia Maria copper project in Peru is closer to reopening. The miner says it has resolved a legal dispute blocking its development.
The Tia Maria copper project in Peru is closer to reopening. On Thursday (April 26), owner Southern Copper (NYSE:SCCO) said it has reached a settlement with a company blocking its development.
Southern Copper Chief Executive Oscar Gonzalez told Reuters that the legal injunction blocking the development of the US$1.4-billion project has been resolved, allowing the massive copper project to clear another hurdle on its way back to operation.
Work at the Southern Peru-based project has been suspended since 2015 following deadly protests by local farmers worried about its environmental impacts on water supplies in the region.
Hopes for a 2018 reopening were dimmer after new Peruvian Prime Minister Cesar Villanueva told reporters in mid-April that his government would not “impose” any mining projects on communities.
“We’re not going to impose any mining project without communities feeling at ease first … that’s what dialogue is for,” said Villanueva.
But Southern Copper doesn’t appear fazed — in the company’s first-quarter report for 2018, Chairman of the Board German Larrea was quoted as saying he is confident that improved investment conditions in Peru will pave the way for the project’s construction permit to be granted.
“We believe the new administration of President Martin Vizcarra will work to provide equitable investment conditions while promoting stability, economic growth and social progress in Peru. These positive conditions will allow us to develop our Peruvian projects of Tia Maria, Los Chancas and Michiquillay, with a combined investment of $6.7 billion,” said Larrea.
“When in operation, these projects will increase our Peruvian copper production by about 500,000 tons,” he added.
Souther Copper estimates Tia Maria will be able to produce 120,000 tonnes of copper per year when operational, and the company expects the project’s construction permit to be issued in 2018.
Currently, the company says it has completed engineering requirements, complied with environmental requirements and obtained approval for its environmental impact assessment.
Peru is the world’s second-largest copper-producing country. On Thursday, Southern Copper’s share price on the New York Stock Exchange closed at US$53.32, up 0.77 percent.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.