The Chinese consortium MMG Limited announced on Tuesday that it has acquired the Las Bambas copper mine for US $5.85 billion. Located in the southwestern Apurimac region of Peru, the mine is expected to produce an estimated 400,000 tons of copper annually.
It will be one of the largest open-pit copper mines in the world once it begins production in 2015, containing a total of 6.9 million tons.
Peru produces 13 percent of the world´s copper, making it the second largest global exporter after Chile. Las Bambas alone is expected to increase Peruvian copper production by 30 percent.
President Ollanta Humala, who ran on a leftist platform in 2011, is supportive of foreign mining investments. There are currently over 100 Chinese firms operating in Peru, and mining accounts for 60 percent of total Peruvian exports.
President Humala has accused leftist sectors of opposing mining projects as a means of expanding their influence to thwart national economic growth. A state of emergency was declared in response to a May 2012 protest at the Tintaya mine, near the
Las Bambas site, which prompted President Humala to suspend constitutional rights and send military forces into the region.
When controlled by the Swiss Glencore-Xstrata, employees of Las Bambas joined with community members in 2013 to block access to the site and burn equipment. Similarly to Tintaya, the protest was squashed by police and military forces. Mines and Energy Minister Jorge Merino said in a 2012 statement, “There is a radical current that says no to (Las Bambas). This means they don´t want mining, which is unacceptable.”
“Our investment in this project of national importance is the first step in what we see as a long-term relationship with Peru,” said MMG Limited CEO Andrew Michelmore. MMG Limited, a subsidiary of China Minmetals, is leading the consortium with 62.5 percent stake, Guoxin International Investment Corporation owns 22.5 percent and Citic Group conglomerate completes with 15 percent.
To support its electronics industry, China is currently the world´s leading copper buyer and largest metal consumer. With the acquisition of Las Bambas, China´s domestic demand will be exceeded, and will pass to be leader in exporting copper to global markets.