BHP bets billions on Chile mines to face global copper crunch
BHP detailed to investors this week plans to spend $10.7 billion to $14.7 billion within about 10 years.
Shares in Canada’s Bear Creek Mining Corporation bounced by over 4% at the open on Wednesday after the company announced it was launching legal action against the Peruvian government to regain its license for a mining concession in the south of the country.
Peru cancelled Bear Creek’s licence in late June after protests against the Santa Ana Silver project resulted in five people being killed by police at an international airport 160km away from the site. Bear Creek’s injunction comes weeks ahead of the swearing in of the South American nation’s new leftwing president Ollanta Humala (pictured).
By midday Bear Creek was trading at $4.12, up 4.3%, on the TSX Venture Exchange on higher than usual volumes. The share is still down about a third from levels it was trading at before the violence broke out and its licence was suspended.
Andrew Swarthout, Bear Creek CEO, said in a statement on Wednesday that despite the legal action the company believes a “political solution” can still be reached.
Bear Creek says the Santa Ana project will provide 1,000 direct jobs, 1,500 indirect jobs, and provide over $330 million in royalties and taxes at the current silver price, and current tax and royalty structure. Santa Ana is expected to producing 5 million ounces annually in the first six years of an estimated 11-year mine life. Production was slated to commence some time next year.
Humala has mooted a windfall tax on resource companies operating in Peru, one of the fastest growing economies in South America, to help with social projects and upliftment of the poor. As it stands Peru charges a royalty of 1% – 3% on mining revenues.
Picture of President elect Ollanta Humala is from Agência Brasil and taken by Antonio Cruz. Humala takes office on July 28, 2011.
