Peru’s Ministry of Energy & Mines said this week that national copper reserves took a massive 31% jump during the past year — rising to 107 million tonnes, from a previous 81 million tonnes.
That’s enough to put Peru at 11% of total global copper reserves — just behind Australia’s 12%, and gaining on #1 Chile’s 29%.
And news this week may help to add to that total. With Peru’s government receiving strong interest in one of the country’s largest available development projects: the Michiquillay deposit, which will be the subject of a planned auction in November.
Local miner Buenaventura kicked off the intrigue around Michiquillay. Saying Tuesday that it is evaluating a bid for the project as part of the November sale.
And it didn’t take long for opposing interesting to emerge for this mega-project.
Local press reported late Tuesday that Southern Copper — a unit of Group Mexico — is also considering a bid for Michiquillay. With CEO Oscar González saying his technical team is currently evaluating a possible offer for the deposit.
Having two firms already interested is a win for the Peru government here. With doubts having presented the last several months about whether Michiquillay would attract much interest from major miners.
For one, the price tag for the development is significant. With the overall investment estimated at $2 billion to bring the deposit into production.
The geology is also challenging — with the Michiquillay ores containing elevated levels of arsenic. Likely part of the reason that initial project owner Anglo American pulled out of the project three years ago.
The rights were then returned to the government — who have since had several false starts in auctioning off the deposit.
But Michiquillay’s saving grace is its large size: with the deposit estimated at over a billion tonnes of copper ore, making it one of the world’s largest undeveloped copper resources. Watch to see if this prize entices more bidders over the coming weeks, and for a final announcement on a sale after the November 15 bid date.