Big deal reached this past week in one of the world’s rising-star nations for copper production.
It didn’t get much press, but one of Peru’s biggest copper mines has now been cleared for expansion — the Toromocho mega-mine, owned by China’s Chinalco.
Chinese government agency SASAC announced late last week that Chinalco has reached a deal with the Peruvian government for a major expansion of Toromocho. Coming as Chinese president Xi Jinping was visiting the country to sign a series of trade agreements.
Officials didn’t give any details on how big the expansion might be. But it’s almost certain to make Toromocho one of the world’s premier copper producers — given that the mine already puts out over 120,000 tonnes of copper yearly.
And the supply growth here could be enough to notch a critical milestone: vaulting Peru into number-two spot for copper production around the world.
According to the U.S. Geological Survey, Peru came in third-place globally for copper in 2015. With Peruvian production for that year rising 16% as compared to 2014 — to a total of 1.6 million tonnes of metal.
That put Peru just behind number-two copper producer China, which pumped out 1.75 million tonnes for 2015. And indications are that Peruvian miners have been further narrowing that gap so far in 2016.
Peru’s National Institute of Statistics said last week that national copper production in September grew 35.9% as compared to the same month of 2015. Continuing a pattern of rising output this year, largely driven by the commissioning of the Las Bambas mine (also owned by a Chinese firm, MMG).
Further growth in output from Toromocho could therefore push Peru ahead of China for number-two spot very soon. Showing there’s a lot of growth potential from this part of the world — which lies just north of the world’s top copper nation, Chile, within very similar geology.
The Chinese-driven production gains here also show how China’s miners are looking abroad for copper supply — as output growth domestically stagnates (Chinese production is up just 7.4% over the last three years, while Peru has vaulted 23%). Watch for more deals being done in Peru and beyond along the prospective South American cordillera.
Here’s to a silver medal copper miner.
By Dave Forest
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