Peru cement company eyes $300 mln phosphate mine

AREQUIPA, Peru Nov 20 (Reuters) - Cementos Pacasmayo, Peru's second-largest cement company, said on Friday it is planning to invest at least $300 million to develop a phosphate mine and processing plant.

The project would be located in Peru's northern Piura district, near where the Brazilian mining giant Vale (VALE5.SA) hopes to start production at its own phosphate mine by mid-year 2010.

Both companies expect to export the majority of their processed product, which is used in fertilizer.

Cementos Pacasmayo (CPAi.LM) is controlled by Hochschild Mining (HOCM.L), one of the largest silver producers in Latin America, with operations in Peru, Argentina, Chile and Canada.

"The preliminary investment is some $300 million to develop the phosphate plant, although apart from this, we expect to invest another $50 million in the construction of a port," Lino Abram, head of Cementos Pacasmayo, told reporters in the southern city of Arequipa, which is hosting a business summit this week.

He said a local subsidiary of Cementos Pacasmayo is doing exploration work at the site and that initial results suggest the company's reserves could be greater than those of Vale.

Vale's mine has reserves of some 238 million tonnes of phosphate, while Abram said that of Cementos Pacasmayo has reserves of around 600 million tonnes.

He declined to say exactly how the company would finance the project, but did not rule out bank loans and bond sales.

The mine is not expected to be up and running for at least 3 years. (Reporting by Marco Aquino; Writing by Dana Ford; Editing by Christian Wiessner)