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. Related: Credit Markets Have Oilfield Services In A Lockdown
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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