Peru Project Pipeline – Tia Maria Copper Project

Peru is a natural choice for mining companies looking for high quality deposits. Currently, it is the second largest producer of copper in the world and stands amongst the top producers for silver, lead, zinc, tin, and molybdenum.

The country has a good mixture of underground and open pit mines already in operation.  In addition, local mining companies have been investing in new technology, equipment, and services over the last few years which has made Peru a very interesting market for METS companies. 

The future is looking good for Peru with a project pipeline that totals around USD$53bn. While that pipeline has not advanced as fast as many would hope over the last few years, there is evidence that it starting to gain some steam.

One of the companies most active in Peru is Southern Copper, Peru’s third largest copper producer, controlled by Grupo México.

Latest News

Last week, a Senior Executive from Southern Copper announced that the Tia Maria project is scheduled to start construction in late 2024 or early 2025, with operations expected to start in 2027. This is a big win for the Peruvian mining industry since the project has been the poster child for community opposition that the country has been dealing over the last decade.

The Tia Maria project has been around since 2011, when it started to face opposition from local communities over concerns that it could impact the river that feeds the agriculture zone in the area. Since then, the project has been a political hot potato with presidents backing it and then withdrawing support. There have been aggressive protests and police responses over the years that has been extensively covered by both national and international media.

Even with community opposition, the company advanced with the project receiving all permits in 2019. Still facing fierce opposition from communities, Southern Copper vowed to build support before any construction would start. The project has been in limbo since then as the company tried lower tension and build support.

Since then, Southern Copper has been working with farming groups, building houses and planting trees, with more than 200 people working in the area. The company has redesigned the project several times to take into consideration feedback from the communities.  

The agricultural area of Valle del Tambo is 3km from the mine, 11km from the processing plant, and a mountain range is separating the desert area where the mine is located from the agricultural valley. Southern Copper will not take any water from the river and will instead use desalinated water for all its needs.

It seems it finally has succeeded. Raúl Jacob, vice president of finance at Southern Copper — said that “social conditions” have improved after years of protests that have slowed the development of the deposit in the south of the country.

The timing could not be better as copper prices are trending higher while analysts are predicting a major shortfall in the metal over the next decade.

Tia Maria Project

• The Tia Maria copper mine is a greenfield project located in Southern Peru. 
• Southern Peru Copper Corporation, a unit of Grupo Mexico, owns 100% of the project.
• The project was originally expected to cost USD$1.4b but the company acknowledges that the price will likely rise due to inflation.
• The project is expected to produce 120,000 metric tons (mt) of copper from two open pits Tapada and Tia Maria over a mine life of 20 years. The Tapada deposit will produce 40,000t per year – and then the Tía María deposit – 80,000t per year.
• During construction, 3,600 direct jobs are expected to be generated, in addition to numerous indirect jobs in the sector. During the operation phase, 5,400 jobs are expected to be created.
• The crushed ore from the primary crusher located near the pit will be transported via a conveyor to the coarse ore storage with a capacity of 60,000t. The ore will be then fed into three lines of secondary crushers followed by six tertiary crushers.
• Girdles will collect the final product for acid curing and agglomeration, which will be done in agglomerating drums by adding water to a refining solution along with concentrated sulphuric acid.
• The agglomerated ore is then transported via a set of belts to the dynamic leaching stack. Dynamic piles with a base layer of low permeable compacted clay will be used to leach the mineral.
• A drainage system will collect the leached solution in a sedimentation pool from where the overflow will be transferred to two leaching pools to produce pregnant leach solution (PLS). The PLS will be processed at the electrolytic solution circuit, which will transfer copper to an electrolytic solution using an organic solution.
• Desalinated seawater will be used for mining operations, requiring the use 235l/s of water during its operation, which will be transported through a series of pipelines. Of the total seawater collected, 40% will be used in the mining process and 60% will be returned to the sea in the form of brine.
• The project can be accessed from the Pan American Highway in the Cachendo sector through a 5km paved road, which will be modified to an all-weather access road. A new 32km railway line from Guerrero to the mining facilities will also be constructed.
• Power supply required during construction will be met with portable electric generators. Once mining operations start, power will be received from the Montalvo substation.
• The final copper concentrate will be transported via a rail to Matarani port for export.

Conclusion

Peru did not have many mining projects enter construction during 2023.  The last major mine to be built was Anglo American’s $5 billion Quellaveco project, which came online in 2022.

The construction announcement for Tia Maria is a great sign for the Peruvian mining industry. It will signal to the world that large deposits with heavy community opposition can be built in the country. 

It also sets off a record investment for Southern Copper who have stated that they will spend close to USD$8b over the next 8 years in Peru. In addition to Tia Maria ($1.4 billion) which is expected to start operation in f2027; the company will also advance with the expansion of the Smelter, Moquegua, ($1.3 billion) for 2029; the start of the Los Chancas project, Apurimac, ($2.6 billion) in 2031 and the start of operations of Michiquillay, Cajamarca, ($2.5 billion) in 2032.

Peru is already a great market for mining suppliers, but the pipeline of future projects makes it even more interesting.  Peru has grown its copper production considerably over the last 10 years and the expectation is that it will continue to do so. The country is positioned very well in the coming years to supply copper to what could be a very tight market. 

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