Mitsubishi eyeing increased Quellaveco stake - source

Japan's Mitsubishi is looking to increase its 18.1% stake in the Anglo American-controlled Quellaveco copper project in Peru, according to a source close to the matter.

An Anglo spokesperson told BNamericas that the company would seek to reduce its stake in Quellaveco and other future greenfield projects "at the appropriate moment and once commodity prices have improved."

The company said in 2015 it aimed to "syndicate the capital exposure" at Quellaveco given the project's magnitude, and copper CEO Hennie Faul was quoted as saying shortly after that Mitsubishi, which bought its current stake in 2012 from the IFC, was a good partner and would be Anglo's first option.

Talks with Southern Copper had reportedly fallen through because each company wanted a controlling stake.

Quellaveco is a key element of Peru's projected copper production growth for the medium term. Originally slated for startup in 2016, the project underwent an intensive community roundtable process in 2012, successfully gaining local support, but was deferred mainly due to market factors. An EIS for the project had been approved in 2000.

According to Peru's mines and energy minister, Gonzalo Tamayo, Anglo American is expected to make an investment decision on the project in 2018.

"The project has been halted since 2015 due to markets. But the situation at Anglo American has improved," the source said.

The Anglo spokesperson said the company remains focused on strengthening its balance sheet with a view to restarting dividend payments near the end of 2017. "Once that has been achieved, the company will be in a position to look at growth projects."

An updated feasibility study is underway at Quellaveco. The latest estimates show capital requirements of US$5bn and annual production of 225,000t/y copper in concentrate.