Xstrata £1bn upgrade for Peru mine
XSTRATA has approved a £1bn expansion of its copper mine in southern Peru, which will boost the firm’s output and extend the life of the mine by 20 years.
The mining group’s existing projects at Tintaya were due to run out of ore in 2012, but Xstrata said yesterday it will develop the deposits nearby.
The expansion will boost average production of copper in concentrate at the site by 60 per cent to 160,000 tonnes per year for the first six years.
Construction is due to start later this year and the new mine should be launched in the
second half of 2012.
The expansion is part of Xstrata’s plan to boost the group’s overall volumes by 50 per cent over four years. It said it plans to focus on organic growth rather than acquisitions.
“From the various site visits we’ve conducted over the years we believe Xstrata can deliver this, although the market remains sceptical,” analyst David Butler at JP Morgan said in a note.
Last year, Xstrata’s overall mined copper output fell 4.8 per cent to 907,000 tonnes, though in the first three months this year it rose three per cent.
Shares in Xstrata rose 0.4 per cent to 909.4p yesterday, compared to a one per cent rise in the FTSE 100.