Jul 13, 2012 (Dow Jones) LIMA -- Anglo American PLC (AAL.LN, AAUKY) has reached an agreement with authorities in Peru's southern region of Moquegua for the development of its Quellaveco copper project, a high-ranking government official said.
Prime Minister Oscar Valdes said in a statement late Thursday that Anglo American has agreed to invest 1 billion soles ($380 million) in a social fund. The company also agreed to hire 80% of its unskilled workers from the local population, Mr. Valdes said.
The government says the project will now require an investment of $3.3 billion, up from a previous estimate of $3 billion.
Quellaveco is one of Peru's biggest mining investment projects, but it had faced delays due to opposition by local communities and politicians over concerns about water supply. The company had been holding talks to resolve the concerns.
Anglo American said earlier this week that its board of directors will meet in October to vote on approving the project. Construction at Quellaveco could start shortly after, the company said.
Production at Quellaveco is expected to begin in 2016. The mine is slated to produce 225,000 tons of copper per year
Anglo American has an 81.9% stake in the project, while Japan's Mitsubishi Corp. (MSBHY, 8058.TO) holds the remainder.