HudBay Minerals Says Peru Copper Project Remains On Track
February 13 2012 - 9:46AM
Dow Jones News
Canadian mining company HudBay Minerals'(HBM, HBM.T) Constancia
project in Peru remains on track despite an announcement from the
government last week that it will ask mining companies in Cuzco
region to temporarily suspend operations.
The government said last week that it will ask HudBay and Minera
Ares SAC, a unit of Hochschild Mining PLC (HOC.LN), to suspend
operations for a 30-day environmental audit.
The government request follows talks with residents from the
area of Chumbivilcas, located in Cuzco, who had planned protests
against mining over environmental concerns. Those protests were
called off, the Mines and Energy Ministry said last week.
John Vincic, HudBay's vice president of investor relations, said
the community opposition was not aimed at Constancia.
HudBay plans to invest $1 billion to develop Constancia. The
company has said it plans to begin construction this year with
first production scheduled for late 2014 or early 2015. Constancia
could produce approximately 107,000 tons of copper per year
"The development work that we are doing is continuing," Vincic
told Dow Jones Newswires by telephone Friday. "Overall, our project
remains on track."
Hochschild Chief Executive Ignacio Bustamante said in an
interview with newspaper El Comercio on Saturday that Ares complies
with all environmental regulations.
Protests against mining have brought a number of projects in
Peru to a halt. The country is an important producer of base and
precious metals.
Opponents say they are concerned about mining's impact on the
environment, particularly its water usage.
The latest project to be delayed is Newmont Mining Corp.'s (NEM)
$4.8 billion Minas Conga copper-gold development, located in Peru's
northern Cajamarca region. Conga was suspended in November
following days of protests by local residents and politicians that
claim it will harm their water supply.
Celfin Capital said in a research note that the opposition to
mining appears to be spreading to other parts of Peru.
"The use of water in mining has become a major source of dispute
and potential conflict," said Celfin Capital. "The concern that new
mining projects could lead to water shortages, and increase risks
of contamination, is moving from Cajamarca to other districts of
Peru."
Mining companies in Peru plan to invest more than $50 billion in
new projects and expansions this decade.
-By Ryan Dube, Dow Jones Newswires; 51-945 043 802;
peru@dowjones.com
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