Peru's El Brocal to Begin Zinc Deposit Study in 2011, CEO Says

LIMA, Sept. 20 -- Soc. Minera El Brocal SA, a Peruvian zinc producer, will start a pre-feasibility study next year for Peru's largest untapped zinc deposit, Chief Executive Officer Ysaac Cruz said.

The Lima-based company may make a decision in 2012 on the development of the $300 million San Gregorio project, Cruz said today in an interview in Lima. El Brocal, which is controlled by gold producer Cia. De Minas Buenaventura SAA, will also finish work by early 2012 on a $200 million expansion that will triple its zinc, lead and copper output, he said.

Peru, the world's third-largest zinc producer, has lined up $41 billion in mining investment over the next decade, according to the Andean nation's Energy and Mines Ministry. San Gregorio, a 3,000-hectare (7,400-acre) deposit with 70 million metric tons of reserves, may produce 220,000 tons of zinc a year, the ministry said.

"An increase in Peru's zinc production will be offset by falling output at mines abroad," Cruz said. "Growth in China, India and Brazil will boost demand, more so once the U.S. and European economies recover."

El Brocal gained 1.1 soles, or 2.7 percent, to 42 soles at 1:23 p.m. in Lima trading.