Cia. de Minas Buenaventura SA is tripling annual output at its Marcapunta copper mine to about 60,000 metric tons. Another expansion would take it to 100,000 tons, making Marcapunta one of Peru’s 10 largest mines, Chief Executive Officer Victor Gobitz said. Buenaventura subsidiary El Brocal operates the mine.
“If there was a significant increase in prices, that would be our next step,” Gobitz said in a telephone interview Friday. A subsequent expansion “would involve less risk, less capital and more returns.”
Copper has rebounded from seven-year lows and on Monday the metal breached the $6,000-a-ton level, or about $2.70 a pound, after data showed China’s economic growth is accelerating. Buenaventura has budgeted its projects with a conservative copper price forecast of $2.50 to $2.60 a pound over the medium term. The Lima-based company could pull the trigger earlier than planned in some of the 10 projects it has in the pipeline if prices rise higher and faster than expected.
“We are aware that the number can be quite a bit higher over the long term,” Gobitz said. “But our experience over the last years with greenfield projects is that you need to be rigorous and you can’t jump any steps.”
Buenaventura’s next focus is to develop Quecher Main, a project that will allow it to extend the life of Yanacocha, the largest gold mine in Latin America, through 2025 or 2026. The company will be able to self-finance the investment, which will range from $250 million to $300 million, Gobitz said, adding that a final decision on the project is expected next quarter with production scheduled to begin by mid-2020.
While mid-sized projects such as Quecher Main and San Gabriel gold project don’t necessarily require a partner, others such as greenfield copper project Trapiche might, Gobitz said.
“We are open to the option of partnering, but we are not actively looking for a partner yet,” he said. “We are aware that the more mature the project is, the more convenient it will be for Buenaventura to look for a specific partner.”
The company will focus on developing Trapiche and reaching long-term agreements with local communities over the next year and a half. “When this phase is finished, we could actively think about a partner,” Gobitz said. — Neal Bhai Reports