8 LatAm copper projects aimed at satisfying energy transition demand

Eight Latin American mining projects totaling investment of over US$14bn are expected to provide some 2.3Mt/y of copper starting in 2023, including output from ongoing operations that are expanding. 

With new mines and expansions, mining companies in Brazil, Chile, Mexico, Panama and Peru are looking to seize the opportunities of the global energy transition.

“From renewable energy infrastructure to electric vehicles, the transition to net zero cannot happen without copper,” Eduardo Mencarini, a partner at McKinsey, said during London Metal Exchange Week in October.

Demand for copper "will grow 3% a year for the next 10 years, driven by electrification, infrastructure, industrial production and a growing middle class," he added. 

However, the main copper producing countries in the region, Chile and Peru, have seen output decline. Chilean production fell 7% year-on-year during the first eight months of 2022, due in large part to postponements because of the pandemic and operational problems related to lower grades and water scarcity in the north, where most of the world’s largest copper producer’s big open pit mines are located.

In number two producer Peru, production during the first eight months of 2022 was 7% lower than the same period in 2019, prior to the pandemic, as a result of prolonged blockades at two major copper mines, Cuajone and Las Bambas, by surrounding communities.

To maintain their shares of global copper production within the framework of the global energy transformation, going into 2030 Chile would have to invest an average of US$36.3bn annually and Peru US$10.4bn, said Jeannette Sánchez, director of the natural resources division of the UN Economic Commission for Latin America and the Caribbean (Eclac) at the XII Annual Conference of Mining Ministries of the Americas (CAMMA).

BNamericas looks at the eight copper projects.

BRAZIL

Aripuanã - Accumulated capex since 2018: US$629mn

Brazilian miner and metals company Nexa Resources' project is an underground polymetallic mine containing zinc, lead and copper in Mato Grasso state. In Q3 it achieved its first production but aims to hit full capacity during 2Q23. The projection is to produce 28,000t-35,000t/y of copper.

CHILE

INCO complementary infrastructure - Capex: US$500mn

The project at the Los Pelambres mine of Antofagasta Minerals, in Coquimbo region, involves a new grinding line at the Chacay concentrator that will start operating in 1Q23 and a desalination plant with capacity of 400l/s that will begin operating in 1H23. With these facilities, the miner expects to boost Los Pelambres’ copper production by 60,000t/y to 400,000t/y.

El Teniente project portfolio - Capex: US$5.18bn

The project at state company Codelco’s underground mine in O’Higgins region involves works in the Andes Norte, Andesita and Diamante areas that are in the process of depletion to ensure annual production of around 460,000t of copper. As of 3Q22, work at Andes Norte, which is at the deepest level, reached 75.9% progress, while the works in Diamante and Andesita reached 99.6% and 97.2%, respectively. The last two involve 65km of tunnels. Andesita would start operating in October next year and Andes Norte in December, while the works in Diamante are due to conclude this year.

MEXICO

Buenavista - Capex: US$413mn

Belonging to Grupo México, the Buenavista mine is in the northern state of Sonora. The project consists of the construction of a concentrator that, in addition to 100,000t/y of zinc, will add 20,000t/y of copper. The company expects to start operations in 2H23 and reach annual production of 361,200t/y.

PANAMA

Panama CP100 copper expansion - Capex: US$450mn

Canadian company First Quantum looks to reach production of 400,000t/y as of 2023 at its Cobre Panamá mine. Currently, the permitting process is hampered by a delay in the renegotiation of the contract that the mining company has with the Panamanian government. The latter gave a deadline of December 14 for the company to sign the contract, where one of the conditions is to pay the State 12-16% of gross profits as royalties, in addition to income tax.

PERU

Quellaveco - Capex: US$5.5bn

The Anglo American-owned mine is in the Asana valley. The first copper in concentrate production was in mid-July, reaching 20,300t by the end of Q3. Production of 300,000t/y is expected from 2023. 

Toromocho expansion - Capex: US$1.3bn

The project of Minera Chinalco Perú in Junín region aims to increase processing capacity to 170,000t/d to reach production of 300,000t/y. Commissioning (phase 2) is scheduled for the end of 2023.

Las Bambas - Capex: US$782mn

The mine of Chinese-owned company MMG in Apurímac region was due to start operating the Chalcobamba pit this year, but a series of blockades staged by local communities have affected the transport of copper concentrates and the supply of inputs, risking the continuity of the project. If the problems are overcome, copper production could rise to between 380,000t and 400,000t. The mining ministry estimates that it could start operating during 2023.