Govt. pledges to sell off Las Bambas this year

Tuesday, July 29, 2003

Peru has confirmed its intention to turn over the Las Bambas copper deposit to private developers this year via public auction after the supreme court ruled in the government's favor in a dispute about the project, according to local daily Gestion.

The report, which quoted outgoing mines and energy minister Jaime Quijandria, said there are already two companies interested in participating in the process. An investment of US$2bn is thought to be necessary to develop the mine, the paper said.

Some months ago the government put forward the possibility of selling off Las Bambas in two parts on account of the uncertainty regarding the court decision. The idea was to launch an auction for the part recognized as belonging to state company Centromin, with an option to other part of the deposit depending on the court ruling.

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Now that the supreme court has confirmed the government's right to sell off the other part, that zone will also be included in the auction, the former minister was quoted as saying.

Las Bambas, in Apurimac province, includes the Chalcobamba, Ferrobamba, Sulfobamba and Charcas deposits.

It has 40.5Mt of proven reserves grading 2% copper and is one of the deposits the Peruvian government tried to sell off in the 1990s, but the process had to be postponed pending the outcome of the court case.

According to the report, among those previously expressing an interest in the property were global resources group BHP Billiton (NYSE: BHP), Brazil's CVRD (NYSE: RIO), Southern Peru Copper Corp (NYSE: PCU), and US miner Phelps Dodge (NYSE: PD).

Quijandria took over as Peru's economy minister this week.