Buenaventura seeks to unlock $2.7 billion Peru project with water deal

Buenaventura, one of Peru’s largest mining firms, signed a water concession with the government on Tuesday in a bid to unlock the development of a major copper project at a time when the country’s production of the red metal is flagging.

Investment in the Algarrobo project, including both the mine and water infrastructure in Peru’s northwest Piura region, could reach $2.77 billion over 10 years, said Proinversion, the state-run agency that signed the contract with Buenaventura.

The project is contingent on an agreement between the company and neighboring communities, which would ensure the Tambogrande district is supplied with water, often a scarce resource in the high-altitude Andean regions.

Local opposition to mining concessions in Peru often causes years-long delays. It could be three years before Buenaventura initiates the studies necessary for its Algarrobo project, the company said.

“The first step is to build a solid social agreement with communities and authorities. This will lay the groundwork for a consolidated underground copper mining project,” said Aldo Masa, Buenaventura’s vice president of business development and marketing.

Peru is promoting copper project development as its production has stagnated due to a lack of investment and declining ore grades at major mines, according to analysts and industry data.

Peru has fallen to third place in global copper production, surpassed by Democratic Republic of Congo. The world’s top producer remains Chile by some distance.

Buenaventura, which owns several gold and silver mines in Peru, also owns 19.58% of the Cerro Verde copper deposit, the country’s largest copper mine, operated by Freeport McMoRan.

(By Marco Aquino; Editing by Leslie Adler)