9 of the major players in the Peruvian mining industry
The Energy and Mines Minister of Peru has projected a mining investment recovery towards 2018, with global mining mega projects in the commercial operations stage representing a major contribution to GDP.
In a speech at the Building Peru: The Road to the UN’s 2030 Agenda for Sustainable Development, Minister Gonzalo Tamayo is “optimistic that we’ll see mining investment recovery signs by 2018.”
Peru is a country “endowed” with valuable natural resources. After Chile, it is actually the world’s third largest producer of copper and holds the third-largest known copper reserves.
Continuing this theme, Peru is the third largest producer of silver and the sixth largest global producer of gold.
Naturally, Peru has a strong local mining community as well as attracting some of the major players in the mining market. In fact, according to KPMG, the total value of mining investment in Peru is around $US10 billion.
Here, we look at 10 mining companies operating in Peru, both local companies and global mining players:
Founded in 1974, ZINSA produces non-ferrous zinc products to more than 47 countries. The company’s 20,500 m2 plant is located in El Callao, the chief seaport of Peru. 86 percent of the company’s production is exported worldwide.
The second largest underground gold mine in Peru (and the firth nationwide), Consorcio Minero Horizonte has been operating for 33 years. As a private company, it specialises in exploration, exploitation, extraction and development of gold and hydroelectric mineral resources. The company has on average a production of around 190 thousand ounces of gold.
A mining and metallurgical company located in the central Andes of Peru, Doe Run Peru owns the La Oroya metallurgical complex and the Cobriza mine. As one of the leading mining companies in the Centrak Andes of Peru, Doe Run was the fourth largest exporter in the country. The La Oroya complex is specialising in the development of – wait for it, copper, zinc, silver, lead, indium, bismuth, poly metallic, gold, selenium, tellurium and antimony – and breathe. Cobriza, one of the most mechanised underground mines in Peru, with a focus on copper production,
Formed in 2005, Fortuna has two low-cost underground operating mines in both Peru and Mexico. The company is “one of the fastest growing precious metal producers” in Latin America. Based on a mineral reserves and resources report as of December 2015, Fortuna is expecting an annual production of 7 million ounces of silver, 42.8 thousand ounces of gold, 42.5 million pounds of lead and 43.7 million pounds of zinc.
The company’s Peruvian copper operations, which involve mining, million and flotation of copper ore. Southern Copper own and operate the Toquepala and Cuajone mines high in the Andes Mountains, approximately 860 kilometers southeast of the city of Lima, Peru and a smelter and refinery west of the Toquepala and Cuajone mines in the coastal city of Ilo, Peru. The company was founded in 1954, with construction of the Toquepala mine beginning in 1954.
The mining giant has had a presence in Peru as far back as 1990. The company has been developing and exploring a number of copper deposits as well as exploration of iron, zin, borates and precious metal deposits in Peru. Some of the most significant deposit finds the company has made include Pampa de Pongo, Carhuacayan, Yanque Accha, Pukaqaqa, Tia Maria, El Aguila, Justa, Constancia, Corani and Ollachea. One of Rio Tinto’s leading Peruvian operations is the La Granja Project, a copper project in Cajamarca.
BHP Billiton partly owns a large, low-cost copper and zinc mine called Antamina in north central Peru. As of 2016, total copper and zinc production at the site was 146 kt of copper concentrate and 55kt of zinc concentrate.
Gold Fields, the global gold producer, owns and operates the Cerro Corona mine, located in the highest part of the western cordillera of the Andes Mountains in northern Peru. The open pit high margin and copper gold mine, produced around 830 tonnes per hour during 2015 and has a mining licence up until 2023.
The global mining company, founded in 1983, has gold operations in Argentina, Australia, Canada, Chile, Dominican Republic, Papua New Guinea, Peru, Saudi Arabia, the United States, and Zambia. With all those regions, more than 75 percent of the company’s entire gold production comes from the Americas region. In Peru, Barrick owns the Pierina mine, in the Andean Cordillera in north central Peru. The Pierina mine produced 54,000 ounces of gold in 2015
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Lithium producers bullish as EV revolution ramps demand
Rising demand for lithium is stoking prices for the electric vehicle battery metal, fueling long-delayed expansions that still may not produce adequate supplies that automakers need to meet aggressive production plans.
Growing industry optimism from higher lithium prices is a change from last year when funding for mines and processing plants dried up during the pandemic.
Albemarle Corp, Livent Corp and other producers are scrambling to make more lithium, but some analysts worry the recent price jump will not spur a big enough expansion to meet a planned wave of new EV models by mid-decade.
Since January, General Motors Co, Ford Motor Co LG Energy Solution and SK Innovation Co, along with other automakers and battery parts manufacturers, have said they will spend billions of dollars on EV plants.
U.S. President Joe Biden has proposed spending $174bn to boost EV sales and infrastructure. The European Union has similar plans, part of a rush to catch up with global EV leader China.
Those moves have helped an index of lithium prices jump 59 percent since April 2020, according to data from Benchmark Mineral Intelligence, a commodity pricing provider.
The rising demand “reflects what feels like a real and fundamental turning point in our industry,” said Paul Graves, chief executive of Livent Corp, which supplies Tesla Inc. On Monday, it said it would more than double its annual lithium production to 115,000 tonnes.
Graves warned, though, that “it will be a challenge for the lithium industry to produce sufficient qualified material in the near and medium term.”
Albemarle, the world’s largest lithium producer, aims to double its production capacity to 175,000 tonnes by the end of the year when two construction projects are complete. Albemarle's Q1 profit beat expectations thanks to rising lithium prices. Chile’s SQM, the No. 2 producer, said its goal to expand production of lithium carbonate by 71 percent to 120,000 tonnes should be complete by December.
Australia’s Orocobre is paying $1.4 billion for smaller rival Galaxy Resources, a strategy designed to boost scale and help it grow faster in regions closer to customers.
“The next few years are going to be critical in terms of whether there’s enough available lithium supply, and that’s why you’re starting to see commodity prices start to ramp,” said Chris Berry, an independent lithium industry consultant.
The price gains helped Albemarle and other major producers, including China’s Ganfeng Lithium Co and SQM, post big gains in first-quarter profit and boost forecasts for the year.
Even China’s Tianqi Lithium Corp, saddled with debt due to years of low lithium prices, signaled that recovering demand should help it swing to a profit this year.
Forecasts call for demand for the white metals to surge from about 320,000 tonnes annually last year to more than 1 million tonnes annually by 2025, when many automakers plan to launch new EV fleets, according to Benchmark.
Still, demand is expected to outstrip supply in 2025 by more than 200,000 tonnes, so lithium prices may need to rise to encourage producers to build more mines. That could boost the prices consumers pay for EVs. “Companies across the lithium-ion supply chain are in the best position they’ve been in for the last 5 years,” said Pedro Palandrani of the Global X Lithium & Battery Technology ETF , which has doubled in value in the past year.