Resource News

Peru okays Antamina mine expansion

PERU’S prime minister has endorsed an agreement between the regional government of Ancash and joint venture miner Antamina, allowing the company to use profits from mining operations for a planned expansion project.

The agreement is expected to speed shareholder approval for Antamina’s proposed mine expansion project in the Ancash region.

If the project is approved, it will be one of the biggest private investments in Peru in 2010, costing up to $US1.2 billion ($1.34bn), the company said today.

Last month, the suggestion that Antamina might use profits to fund its expansion project — thereby reducing income tax payments to Ancash’s regional government — sparked protests.

Half the income tax paid by mining companies in Peru goes to governments of the regions where they mine. The tax payment is known as the “mining canon”.

At the signing of the agreement, Peru’s prime minister said Antamina’s possible reinvestment of profits would not affect regional development.

Instead, if the expansion project goes ahead, Antamina will compensate for any loss of regional income in the years 2011 to 2013 by directly funding projects in the area.

In 2010 the region of Ancash will receive $US215 million in mining canon taxes from Antamina.

Antamina has said its proposed expansion project could extend the life of the mine until 2029 and increase the complex’s ore processing by 38 per cent.

The Antamina mine in Peru’s central highlands is a joint venture among BHP Billiton, which holds a 33.75 per cent stake, Xstrata, with another 33.75 per cent, Teck Resources with 22.5 per cent and Mitsubishi with 10 per cent.

Antamina produced 314,027 tonnes of copper and 448,332 tonnes of zinc up to November this year…read more at The Australian