Peru Government Sees Major Copper Project Approvals by July 2011

December 22 (Dow Jones) - Peru's Energy and Mining Ministry said Wednesday it hopes to give the required environmental approvals for two multibillion-dollar copper projects within the first seven months of next year. The projects are owned by Xstrata Copper (XTA.LN) and the Southern Copper Corp. (SCCO, SCCO.VL).

A spokesman for the ministry confirmed that in a local radio interview Peru's vice minister for mining, Fernando Gala, said he hoped to approve environmental studies for Xstrata's Las Bambas project and Southern Copper's Tia Maria project between January and July of next year.

Getting environmental impact studies approved by the ministry is a crucial step for mine developments in Peru.
Initial project spending at Las Bambas is seen totaling $4.2 billion and Xstrata has said construction should start in 2011 if regulatory approvals are granted.

The Las Bambas mine is expected to produce 400,000 metric tons a year of copper in concentrate, alongside significant quantities of gold, silver and molybdenum.

Southern Copper's Tia Maria project is expected to produce 120,000 tons of copper a year, while the company plans to spend $934 million on the mine.

Work at the Tia Maria project is currently suspended following a number of protests by nearby residents who fear the mine's effect on their water and environment.

Specialists from the United Nations are due to begin inspecting Tia Maria's environmental impact studies in January and they will have 105 days to make their first report known.

In November Southern Copper said it was studying the technical options for building and operating a desalinization plant, which could cost over $50 million, so it can use sea water instead of river or underground supplies.

Peru is the world's second biggest copper producer, according to figures from the mining ministry.