Engineering & Mining Journal

AUG 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 60 of 107 E&MJ • AUGUST 2018 59 is expectation that projects like Mina Justa, Quellaveco, Pampa de Pongo and Corani will begin construction over the coming months. Even though there has not been an official construction decision about Quellaveco yet, Anglo American already has around 3,000 people in the area doing substantial early works, such as the di- version of the Asana river. The recent sale of an additional 21.9% stake to Japanese partner Mitsubishi for US$600 million is a key milestone towards further de-risking the project. Meanwhile, Minsur made a significant step towards the financing of its US$1.6 billion Mina Justa copper project by selling 40% of the asset to Chile's Alxar Inversiones (part of the Angelini Group) for US$200 million. Finally, Chinalco, that had a very challenging ramp-up at Toromocho over the last years, also announced that a US$1.3 billion expansion at the copper mine in central Peru is under way. In parallel to that, some triggers are yet to be pulled. As an exam- ple, Anthony Hawkshaw, president and CEO of Bear Creek Mining, remained cautious regarding Corani's potential construction sched- ule: "There is only one chance to build a project correctly. It is wiser to spend additional time and investment now on engineering than to rush ahead. We are being deliberate, thorough, and patient to minimize potential risks." Corani, one of the largest undeveloped silver deposits in the world, has a significant zinc content. With the zinc price having reached an 11-year high earlier this year, one would assume there would be pressure to act. However, the project requires a capital expendi- ture of US$585 million, a large amount for a junior company, and Hawkshaw and Bear Creek's shareholders have seen a lot of failures over the years arise from rushing into construction. "When I was a lecturer, I used to tell my students: think first, write later. You can process much more when you are thinking rather than when acting, and I believe this is the right approach for us," he concluded. Upcoming elections: the social aspect Peru will be conducting regional and municipal elections on October 7th, and once again mining will be on the agenda. While the chang- ing of authorities may produce added hurdles in terms of bureau- cracy and relationships, the sector has been generally positive on the potential outcomes of the ballot. Indeed, many believe that there has been a change in how communities and politicians perceive the mining industry, especially in regions where anti-mining sentiment has been high. Luis Rivera, executive VP Americas at Gold Fields, the company running the Cerro Corona mine, declared: "We are used to working in Cajamarca. It is not the easiest environment, but since we started there has not been much opposition. We hope that, with the election, the political side of things will be more favorable to mining moving forward." To ensure new mining projects can be developed in Peru, mining companies have adapted their engagement with the local popula- tions and many are now doing more to build closer ties. Elsiario An- túnez de Mayolo, COO and general manager at Bear Creek, has made community relations a priority for the Corani project. "We have been developing skills and business ideas within the community to create long-term benefits. Mines are always temporary and cannot support the community forever, so it is important to guarantee the long-term future of the local populations," he said. GDP growth in 2017 was only 2.5%, an insufficient figure for a country on its way to further development. Mining will continue to be the key driver of Peru's economy, and taking advantage of the high metal prices will be key to building momentum and unlocking a new wave of mining investment. As has been the case in the last two de- cades, mining projects may prove to be a significant catalyst for Peru to climb the ladder of economic development.

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