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Southern Copper Considering Withdrawal From Peru Project
May 27,2010 10:45CST
industry news
Source:SMM

LIMA, May 26, 2010 (Dow Jones Commodities News via Comtex) -- Southern Copper Corp. (SCCO) has suggested it could yet pull out of its Tia Maria copper mine project in Peru.

Southern Copper Executive President Oscar Gonzalez Rocha told Dow Jones Newswires in an email that "if a minority group succeeds in overtaking the majority we will have to move the equipment purchased to where there is the possibility of mine development."

Gonzalez's reference to a minority group relates to a series of community protests against the mine project. Work on developing Tia Maria is currently on hold while a government-backed technical committee is convened to try to resolve community objections to the mine. It is unclear however when work on Tia Maria could start again.

Currently, a 90-day suspension of work is to begin only once the technical committee convenes. Peru's Ministry for Mining and Energy could not say this week when it might convene however, because it could not confirm yet who the community's committee representatives will be.

Gonzalez said the technical committee's work was "important" and that its observations would be relevant, but said they needed to be "technical and not political."

Protests against the mine have centered on fears it will ruin local water supplies. Last month Southern Copper said it would consider building a dam in order to provide water for the mine, while another alternative is for it to build a desalination plant and use seawater--although this a more expensive option. In February Southern Copper was to present the community with three different water supply options for the mine--underground, over-ground, or seawater--but its attempts to do so were disrupted by protests.

Southern Copper, which has mines in Mexico and Peru, plans to spend $934 million on the Tia Maria project, which is expected to produce 120,000 tons of copper a year.

Peru is the world's second largest copper producer.

 

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