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Commodities

Peru's Southern Copper: global price rally spurring new projects

LIMA (Reuters) - Peru’s Southern Copper Corp, one of the world’s top copper producers, plans to push forward new and pending projects as demand from China and constrained supply helps propel a global price rally, an executive told Reuters on Thursday.

Raul Jacob, the company’s vice president for finance, said in an interview the miner hoped to advance development of the sprawling $5.4 billion Chancas and Michiquillay projects under a new government which will come in after elections in April.

Peru is the world’s second-largest copper producer after its Andean neighbor Chile, where mining firms have cheered global copper prices hitting near 10-year highs, saying it should provide a windfall to support investment.

“The global market is clearly giving us a moment of opportunity, in which we have the possibility to enter with more production, to carry out the financing of projects without major obstacles,” said Jacob.

He said environmental issues in China had led to imports of copper scrap being reduced and replaced by refined copper. “This has pushed prices as high as the levels that we are seeing,” he said.

Better growth prospects in the United States and Europe were also supporting prices, he said, while projects in general were taking longer to come online due to regulation. Southern Copper is set to produce some 943,000 tonnes of copper this year.

Jacob added the firm was “very enthusiastic” to revive a proposed $1.35 billion smelter project in southern Peru, although the project had yet to receive the board’s blessing.

Work with local communities on the Michiquillay project, which would produce around 225,000 tonnes of copper per year, has been “going very well”, he said, while the firm has completed an economic evaluation on the Chancas mine.

Reporting by Marco Aquino; Writing by Dave Sherwood and Adam Jourdan; Editing by Richard Pullin

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