Southern Copper plans to start work on delayed projects in 2014

AREQUIPA, Sept 18 Wed Sep 18, 2013 4:31pm EDT

AREQUIPA, Sept 18 (Reuters) - Global miner Southern Copper expects to start work on two delayed copper projects in Peru next year and could see production from them as early as 2016, the company's chief executive said on Wednesday.

Chief Executive Oscar Gonzalez said in an interview that if copper prices remained around current levels of $3.20 to $3.25 per pound as he expects, the company should have no problem moving forward with investment plans in Peru and Mexico.

Southern Copper, a unit of Grupo Mexico and one of the biggest copper producers in world, expects a little over 650,000 tons in output this year because of stronger activity at its Buenavista mine in Mexico, Gonzalez said.

In Peru, the company's $600 million expansion of its Toquepala mine and the construction of its $1 billion Tia Maria project have been repeatedly delayed because of local opposition and slow-coming government permits.

Gonzalez said the central government has indicated a renewed willingness to move the projects forward.

"We had not seen the kind of support that the government is now talking about. We hope that will help and we will continue our work with locals," Gonzalez said on the sidelines of a mining conference.

"We expect that with both projects, construction can start next year, and they will be ready to operate in 2016," he said.

Tia Maria in southern Peru is expected to produce 120,000 tons per year.

The company is also carrying out more than $3.5 billion in investments at its Buenavista and Agangueo mines in Mexico.

Gonzalez said Southern Copper should boost its annual copper production by 75 percent to 1.2 million tons per year in 2016 if current projects go forward as planned.

A feasibility study for a new mine, Chancas in Peru, is also underway, Gonzalez said, but higher industry expenses mean it could cost more than the $1.2 billion investment previously forecast.

"We expect the feasibility study to be ready this year, and next year, if it's viable, we'll start doing work with communities," he said.

Gonzalez also said Southern Copper is on the lookout for new projects in Peru, Chile, Argentina, Ecuador and Mexico.

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