By Robert Kozak
LIMA, Peru--Silver production in Peru, the world's
second-largest miner of the precious metal, is expected to rise by
about 5% this year, and even more from 2014 to 2016, one of the
largest banks in Peru said.
"The production of silver will post a significant increase in
coming years," Scotiabank in Peru said in a research report
Tuesday.
Between 2014 and 2016, silver output is seen by the bank rising
about 9.0% a year in Peru, as some new and expanded projects
dedicated to silver production come on line, and as a byproduct of
mines dedicated to producing other minerals.
The increased silver production will help boost gross domestic
product and lead to increased government revenue.
The bank said that silver output rose 1.74% in 2012 to 102
million ounces.
Production is forecast to increase this year at Compania de
Minas Buenaventura SAA's (BVN, BUENAVC1.VL) Uchucchacua silver
mine, which produced 11.3 million ounces in 2012. Company officials
forecast an increase in output to 11.5 million ounces this
year.
Volcan Compania Minera (VOLCABC1.VL) increased production of
silver to 22 million ounces in 2012 from 21.1 million ounces in
2011.
Scotiabank forecasts that the expansion at Volcan's Chungar mine
will add an extra 1.5 million to 2.0 million ounces.
Other miners, such as Sociedad Minera El Brocal SAA
(BROCALC1.VL) and Compania Minera Milpo (MILPOC1.VL), are also seen
increasing silver output in the 2013-16 period.
Canada's Trevali Mining Corp. (TV.T), meanwhile, plans to start
commissioning its lead, zinc and silver Santander project in March
this year.
The start-up late last year of Xstrata PLC's (XTA.LN) Antapaccay
mine will also add to silver output this year.
Scotiabank said that from 2014 to 2016, about 40% of estimated
production increases will be as byproducts of three large copper
projects: Xstrata's Las Bambas, Minera Chinalco Peru's Toromocho
project, and Hudbay Minerals' (HBM) Constancia project.
The remaining 60% of increased output is estimated to come from
new projects and modernizations.
Among those are Hochschild Mining's Inmaculada and Crespo
projects.
"These projects are expected to contribute an average
attributable annual production of 10 million silver equivalent
ounces, increasing current production levels by 50%. Both projects
are due to be commissioned in the second half of 2014," Hochschild
Mining says on its website.
Mexico is the world's largest silver producer.
Peru produces a wide range of minerals, such as copper, gold,
and zinc.
Write to Robert Kozak at robert.kozak@dowjones.com
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