Xstrata signs community agreement for Las Bambas

Friday, June 3, 2011

Anglo-Swiss mining group Xstrata (LSE: XTA) has signed an agreement with authorities from the Challhuahuacho district in Peru's Apurímac region to ensure the normal development of the company's US$4.2bn Las Bambas copper project, state news agency Andina reported.

Xstrata had suspended activities and removed personnel from Las Bambas in May over security concerns due to protests. One of the demands of the protesters was for the company to hire more local residents at Las Bambas.

Activities resumed towards the end of the month but residents in Challhuahuacho were planning another demonstration on June 10. The protest has been cancelled thanks to the agreement with Xstrata, the report said.

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During talks with the local authorities, Xstrata said that employment opportunities for local residents would increase gradually because the company is about to start construction.

Construction is scheduled to start in Q3 following the completion of final permitting and first ore is expected to be processed in 2Q14.

Las Bambas will have a mine life of 18 years with initial production of 400,000t/y of copper in concentrate, including gold, silver and molybdenum as byproducts.