Southern Copper eyes start of stalled Peru mine project as soon as this year

The company has had permits to build its Tia Maria project for years yet held back because of environmental opposition. A 2019 decision to approve its license unleashed weeks of protests and then-President Pedro Castillo called the mine a non-starter. The current government says it’s supportive.

“The opportunity that this presents for the region and the country is being seen,” chief financial officer Raul Jacob said Monday in an interview.

Developing Tia Maria would be a big deal for the company, Peru and the global copper market. The stalled project has stood as a symbol of the difficulties of building new mines — a key reason for copper’s surge to record prices this year as investors bet on demand exceeding supply.

Southern Copper is working with farming groups, building houses and planting trees, with more than 200 people working in the area and $350 million in equipment ready to be assembled, Jacob said. That provides a pathway to start work late this year or early next year on a project that will probably cost about $500 million more than the official $1.4 billion estimate, he said.

With all permitting and board approval in place, the only thing to do before pulling the trigger on construction is to “check that we are in an appropriate social environment to start construction,” Jacob said.

Bringing Tia Maria on stream by the end of 2027 would generate a much needed 120,000 metric tons a year of metal for a market hit by a string of supply setbacks of late, including the closure of a major copper mine in Panama.

Tia Maria would consolidate Southern Copper’s annual copper production above 1 million tons a year. The project would also be a major breakthrough in a country where mining’s relations with isolated rural communities often sour.

Southern Copper expects to increase copper output by 3% or more this year, with production so far tracking just above expectations, Jacob said. Output beyond this year at existing copper operations will depend largely on ore quality, he said.