Peru’s mining industry grows

Materials World magazine
30 May 2019

One of Latin America’s ore giants is growing in size and global influence.  

Metalliferous mining is dominant in Peru’s economy. Abundant physical deposits combined with a healthy tax and legal regime to underpin the country’s success.

The recently released Fraser Institute survey of senior mining executives is revealing. In the survey’s investment attractiveness index, Peru came 14th out of 83 jurisdictions in 2018 – a substantial increase over 19th of 91 in 2017, and well over the 36th of 109 in 2015. In the particular Fraser Institute region, which comprises Latin America, the Caribbean and Argentina – where the latter is compiled by breaking that country down into separate districts – Peru is second only to Chile. As one survey respondent from
a consultancy commented, ‘The professionalism of Peru’s mining institutions is exemplary in terms of the level of information it provides to investors.’

Foreign investment

Peru’s abundance of resources has attracted attention and investment from all over the world. For example, the Rio Blanco open-pit copper mine lies in northern Peru near Ecuador and is 45% owned by China’s Zijin Mining Group Company. Zijin’s key projects are located in 18 provinces and 11 overseas countries. The company is listed in Hong Kong and Shanghai and is mainly involved in exploring for and mining gold, copper and zinc as well as other mineral resources.

Rio Blanco is in turn the core asset of Rio Blanco Copper SA. It is hosted by a multi-phased intrusive porphyry complex, dated at about 11 million years. At least three generations of intrusive and mineralising events have been identified at Rio Blanco, which also exhibits the classic patterns of hydrothermal alteration associated with this type of mineral deposit. The total ore resources of the opencast copper mine are 12.57 billion tonnes (Bt) grading at 0.57%, and the mine’s life is more than 20 years.

BHP in Peru

‘BHP’s exploration programme in Peru is focused on early greenfield opportunities owned by BHP or via third party exploration agreements,’ a BHP representative told Materials World.

This partial ownership of companies is demonstrated by BHP’s 33.75% holding in Compañía Minera Antamina SA, which operates Antamina, a complex in northern Peru 276km north of Lima, where copper, zinc, molybdenum, silver and lead concentrates are mined. This site – which derived its name from anta, the local Quechua word for copper – offers many challenges to miners, not least its location at 4,300m above sea level and its shipping port Punta Lobitas. This has not, however, dissuaded investors from putting in US$3.6bln.

The other shareholders in Antamina are Glencore at 33.75%, Teck at 22.5% and Mitsubishi with 10%. Antamina is one of the largest producers in Peru of copper and zinc concentrates and one of the top 10 anywhere in the world by volumes produced. In this respect, Antamina achieved 245 million tonnes (Mt) mined for the 2017 financial year.

Mining methods

Antamina practices underground blasting, which takes place under a sequential pattern 24 hours a day in 12-hour shifts. Once the ore is fragmented from the mining extraction process, it is loaded with electric shovels onto Caterpillar and Komatsu heavy machinery transport units for transfer to the crusher. The crusher breaks the ore down into 12.5cm chunks ready for transfer to the concentrator plant.

The next phase is milling and grinding. The concentrator plant receives the ore from the primary crusher and distributes it with its stacker into stockpiles outside the plant. The ore is transferred to the SAG mill, and then to three ball-grinding mills. After this the resulting pulp of water and ore is sent to flotation cells where the metals – copper and/or zinc, silver, lead and molybdenum – are recovered as planned. The pulp is then thickened to reduce water content, which allows for more cost-efficient and appropriate transportation and storage in tanks outside the plant.

Pipeline and port

Next, the copper and zinc concentrates are dispatched to the Punta Lobitos via the slurry pipeline, a process lasting just over two days. To ensure this stage runs efficiently and safely, a fibre-optic automatic monitoring system functions, along with four valve stations that control the pressure and speed of the concentrate as it passes through the slurry pipeline. The concentrate reaches storage tanks in the port and is then channelled to the filtration plant where excess water is removed.

The water byproduct is then separated and duly treated for use as irrigation in the Huarmey forest, highlighted below. In turn, the dry concentrates are transferred to a storage facility with a water content of between 8.5%-9% and are finally sent through an enclosed conveyor belt system along the length of the dock to the ship loader immediately prior to export.

MMG at Las Bambas

Headquartered in Melbourne, Australia, but with the major share in China’s Minmetals, MMG was founded 10 years ago under its previous name Minerals and Metals Group.

China Minmetals Corporation (CMC) acquired assets through its subsidiary China Minmetals Non-ferrous Metals Co Ltd (CMN) of OZ Minerals Limited (OZ Minerals). Subsequent changes led to MMG completing a secondary listing on the ASX in December 2015.

MMG’s initial aim of becoming a mid-tier miner is on course for next year. It is intended that this will be followed up with advancement to the ranks of the world’s leading miners. The company’s major copper mine is Las Bambas in Peru’s Apurímac region. Las Bambas lies well within southern Peru and is, like Antamina, located more than 4,000m above sea level.

The core metal is copper concentrate but there are gold, silver and molybdenum byproducts. The mine came fully on stream in 2016 after MMG devoted a decade to its exploration, construction and development. The consequences have been noticeable. Full production means Las Bambas is now one of the world’s largest copper mines, with the knock-on effect of helping Peru become the world’s second-largest copper producer.

Las Bambas hosts three deposits, namely Ferrobamba, Chalobamba and Sulfobamba. Mining currently takes place at Ferrobamba where ore reserves run to 7.2Mt of copper and overall resources touch 12.6Mt. MMG’s aspiration is to produce more than 2Mt of copper in concentrate in the first five years of production. The full life-of-mine is 18 years at present.

Ore at Las Bambas is mined from an open-pit before crushing and transportation via a 5.5km overland conveyor to a conventional flotation plant, where copper concentrate is produced, then to a molybdenum plant for further processing.

The copper concentrate is driven 458km by truck to Pillones Station where it is transported a further 286km by train to the Port of Matarani and onwards to overseas markets.

The shape of water

Peru has a reputation for being mountainous and arid. Indeed, 12 years ago the area around Antamina was one such patch of desert. These days, a 177ha forest surprises visitors with its variety of birds, mammals and fruit trees. This leads to the question of how did this oasis form in such a barren environment? Antamina’s operations hold the answer, for mineral concentrates are transported from the mine to the port at Huarmey via the slurry pipeline in the form of a ‘pulp’ which is 40% water.

Antamina’s operators were left with the challenge of what to do with the water. The answer was arrived at in 2001 when a system for dissipating it was developed. When the water holding the concentrates is received at the port, gravity separates it into clarifiers before it is filtered. The water volume at this point equates to 28-35L/s. Once cleaned it is employed for micro-sprinkler watering, hence the forest.

Growing strength

Peru continues its rise in importance, not just for the sheer quantity of minerals mined but also for the dedication shown by companies mining there as they operate to the highest standards of sustainability and also demonstrate creative solutions to challenges such as the reuse of water.