Southern Copper’s US$10.3B Investment in Peru

Peru’s mining industry enters 2025 with cautious confidence. Despite years of social tension, regulatory complexity and delayed investment decisions, the sector has remained resilient, supported by strong global demand for copper and critical minerals driven by the energy transition. While the path forward has been slowed by community relations challenges, permitting delays and political uncertainty, Peru continues to hold one of the region’s most significant mining pipelines, with 67 projects representing an estimated US$64.1 billion in potential investment. Yet progress has been uneven, with only three of the seven government-prioritised projects for 2025 advancing meaningfully.

At the centre of this renewed momentum is Southern Copper, a company with more than five decades of operational presence in Peru through Toquepala, Cuajone and the Ilo smelter complex. Today, it is preparing for one of its largest investment cycles in the country, signaling up to US$10.3 billion in future capital focused on four strategic developments: Tía María, Michiquillay, Los Chancas and the expansion of the Ilo Smelter. Together, these projects not only shape the next phase of copper production in Peru, but also define where new opportunities will emerge for mining technology and service companies seeking to participate in the country’s evolving industrial and operational landscape.

Tia Maria Project – USD$1.8bn

• 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$1.8b but the company acknowledges that the price will likely rise due to inflation.
• According to the latest presentation, the project is almost 25% compelted after starting contrcution with work on access roads, auxiliary facilities,treatment plant, and platforms almost complete.
• 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.
• 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. The final copper concentrate will be transported via a rail to Matarani port for export.
• Power supply required during construction will be met with portable electric generators. Once mining operations start, power will be received from the Montalvo substation.

Los Chancas Project – USD$2.6bn

• Los Chancas is a large-scale porphyry copper-molybdenum project located in the Apurímac region of southern Peru. It is owned and being developed by Southern Peru Copper Corporation, the Peruvian subsidiary of Southern Copper and Grupo México.
• The total estimated capital investment is approximately USD$2.6 billion, making it one of Southern Copper’s most significant medium-term developments in the country.
• The project is currently in the environmental and early development phase. Southern Copper is preparing the Environmental Impact Study (EIA) and advancing land acquisition and permitting processes, while also coordinating with authorities to regain full control of the concession area due to the presence of illegal miners.
• Indicated mineral resources are estimated at 98 million tonnes of oxide ore with a copper grade of 0.45% and 52 million tonnes of sulfide ore with a copper grade of 0.59%, highlighting a deposit with both leachable and concentratable ore zones.
• The development concept envisions an open-pit mining operation combining concentrator and leaching processes, allowing the project to process both oxide and sulfide material efficiently.
• Once operational, Los Chancas is expected to produce approximately 130,000 tonnes per year of copper and 7,500 tonnes per year of molybdenum, positioning it as a meaningful contributor to Peru’s future copper output.
• Operations are currently projected to begin between 2030 and 2031, although this timeline is subject to progress in environmental approvals, land access agreements, and resolution of security issues related to informal mining activity.
• Southern Copper has recently advanced surface land acquisition, including agreements with local communities such as Tiaparo, as part of its strategy to strengthen legal and operational control over the project area.
• The project’s mixed oxide and sulfide profile opens opportunities for diverse processing technologies, including heap leaching, SX-EW systems, flotation circuits, and advanced metallurgical solutions.
• Given its scale, Los Chancas will require substantial infrastructure development, including access roads, water management systems, tailings facilities, power supply infrastructure, and logistics solutions suitable for high-altitude Andean operations.

Michiquillay Project – USD$2.5bn

• Michiquillay is a large-scale copper growth project located in the Cajamarca region of northern Peru and is fully owned by Southern Peru Copper Corporation.
• The project carries an estimated capital expenditure of approximately USD$2.5 billion, positioning it as one of Southern Copper’s most significant long-term investments in Peru.
• Michiquillay is currently in the conceptual and advanced study phase, with technical work focused on defining the mine layout, tailings strategy, and overall processing configuration.
• Inferred mineral resources are estimated at 2,288 million tonnes, with an average copper grade of 0.43%, making it one of the largest undeveloped copper deposits in the country.
  Projected annual production is approximately 225,000 tonnes of copper, along with by-products including molybdenum, gold, and silver, supporting a robust production profile and diversified revenue stream.
• The initial mine life is expected to exceed 25 years, reinforcing Michiquillay’s role as a long-term anchor asset within Southern Copper’s Peruvian portfolio.
• Start of operations is currently targeted for 2032, which would position Michiquillay as one of Peru’s largest copper mines once in production.
• A conceptual study is underway to determine the optimal configuration for tailings management, including evaluation of conventional tailings versus filtered tailings facilities, reflecting increased focus on environmental performance and water efficiency.
  Ongoing technical work also includes detailed hydrological, hydrogeological, and geotechnical studies to define water sourcing, ground stability, and infrastructure placement in line with international best practices.
• The project will require extensive infrastructure development, including access roads, water supply systems, tailings storage facilities, processing plants, power transmission infrastructure, and accommodation camps for construction and operations.

Ilo Smelter Expansion – ~ USD$1.3 bn

• Southern Copper plans to invest approximately USD$1.3 billion in the expansion of the Ilo Smelter in southern Peru, as part of its broader long-term growth strategy in the country.
• The expansion is designed to significantly increase the complex’s smelting and refining capacity, enabling it to process higher concentrate volumes from both existing operations and future projects such as Tía María, Michiquillay, and Los Chancas.
• As an initial phase, the company has launched near-term works totalling approximately USD$270 million to upgrade core smelter and refinery infrastructure, aimed at lifting copper cathode production capacity and improving operational efficiency.
• In 2024, Southern Peru Copper Corporation received environmental approval to modify key sections of the Ilo refinery, representing the first regulatory milestone in the expansion program. These approved works involve at least USD$62 million in targeted upgrades to smelting and refining systems.
• The modernisation program focuses on improving energy efficiency, including partial conversion to natural gas, upgrading processing technology, and strengthening environmental performance standards.
• Strategically, the expanded Ilo Smelter will function as the central processing hub for Southern Copper’s growing Peruvian production base, ensuring downstream capacity scales in line with its multi-billion-dollar mine development pipeline.
• Near-term upgrade works are currently underway, while the full-scale expansion remains in the planning stage, with completion timelines expected to align with the ramp-up of new supply from Southern Copper’s major projects later this decade.

Conclusion

Southern Copper’s current pipeline in Peru represents far more than a traditional expansion cycle. It signals a structural shift in the scale, complexity, and long-term depth of the country’s mining landscape. With more than US$10.3 billion committed across Tía María, Los Chancas, Michiquillay, and the Ilo Smelter expansion, the company is reinforcing Peru’s role as a cornerstone of its global copper strategy while helping redefine the next generation of mining operations in the country.

For mining technology and service companies, this investment wave reveals where future demand will concentrate: large-scale open pit developments, advanced tailings and water management systems, upgraded processing facilities, energy efficiency solutions, and increasingly stringent ESG and environmental performance requirements. These projects will require not only capital, but innovation, operational efficiency, and technical sophistication, creating a clear entry point for firms capable of supporting more complex and sustainable mining models.

While social, regulatory, and execution risks remain part of Peru’s operating reality, the direction is clear. Southern Copper’s commitments indicate renewed confidence in the country’s long-term mining viability and a willingness to advance multi-decade assets despite short-term volatility. For companies seeking to position themselves strategically in Latin America, Southern Copper’s investment roadmap provides a practical lens through which future opportunities, partnerships, and technology deployment points can be identified within Peru’s evolving mining ecosystem.

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