Peru’s copper production would remain stable in 2025 at almost the same level for the third consecutive yearaccording to the largest union of mining companies and analysts in the sector, because the decrease in ore grades and the lack of new projects are limiting production.
The South American country is the world’s third largest metal producer, just behind the Democratic Republic of the Congowhich snatched second place from Peru last year.
But declining copper grades after decades of mining high-quality deposits are challenging Peru’s miners to maintain production.with a large deficit looming in the next decade due to anticipated demand for the metal for electric cars, renewable energy and data centers.
Of the ten largest copper mines in Peru, seven reported lower production between January and October, the last month with official data availablecompared to last year. The sector is expected to close the year with around 2.8 million tons, almost unchanged from last year.
Peru’s main mining association, Snmpe, expects the supply to be the same next yearas miners grapple with how to extract more copper from lower quality resources.
“It is expected that by 2025, Peruvian copper production will be similar to what was expected this year”said Víctor Gobitz, leader of Snmpe and president of Antamina, controlled by Glencore and BHP, in a recent telephone conversation with Reuters. The vice president of the Institute of Mining Engineers of Peru, Juan Carlos Ortiz, also agreed with that estimate..
“Copper production (2025) will be similar to 2024, because there are no new copper projects coming in next year. Only the same mines that have been operating this year,” said Ortiz, who is also vice president of operations at the Peruvian Minas Buenaventura, on Thursday.
Peru’s Ministry of Energy and Mines has not issued an estimate for 2025 and did not respond to requests for comment.
It is unlikely that there will be a drastic change in the short term, without major new mines being built. ANDhe last new field in Peru was Anglo American’s Quellaveco, which came into operation in 2022 after an investment of US$5.5 billionand which now represents just over 10% of national production.
In the best-case scenario, Peru would get a boost with two smaller projects: Southern Copper’s Tía María, with production planned for 2027, and Teck Resources’ Zafranal and Mitsubishi, planned no later than 2029. Together, the projects would add 150,000 tons of copper per year to the South American country’s production..
Greater effort
Meanwhile, Mining companies are working to increase their processing capacity, with more labor and more investment in their processing plants.since copper from lower ore grades requires more work to refine.
Energy consumption in the country’s largest mines until October increased 2.3% year-on-year, according to the private electricity sector organization Coesreflecting the need to work harder to stay in place.
In addition, The workforce employed in the mining sector in Peru reached a new historical record in October, with 247,520 workersin the sixth consecutive monthly advance.
“The main mines are entering a phase of decline in their productivity,” said Diego Díaz, partner and mining analyst at the consulting firm Macroconsult.. “And they need to process more ore to maintain their copper production.”
Most of the $3.8 billion invested in the sector this year through October (up 2% after investment fell 4% in the same period of the previous year) was allocated to processing plants and equipment.
“What matters now is that work continues so that the projects that are in the pipeline continue to mature”Gobitz said, referring to projects such as Tía María, Zafranal and expansions or extensions of the useful life at existing mines. “A project like Quellaveco is not envisioned,” he emphasized.
The largest mine in PeruCerro Verde, controlled by Freeport McMoRan and representing almost a fifth of national production, hhas seen its production fall by 5.4% year-on-year between January and October.
The company had previously forecast lower ore grades that would impact 2024 sales volumes.
“Annual production will vary depending on ore grades,” said the Freeport-McMoRan spokeswoman.Linda Hayes, by mail although without detailing the volume for the end of the year. “Cerro Verde’s operating rates in 2024 have been strong, supported by a motivated and dedicated workforce”he stated.
Hayes of Freeport-McMoRan stated that to attract investment and seek more production Peru should “improve regulatory frameworks”. In addition, “promoting responsible practices and encouraging mining exploration could create a more attractive environment for the sustainable growth of the sector,” he noted.
Despite Peru’s difficulties, it may have a chance to regain second place in the world from Congo. At the end of August, Congo’s production fell almost 6% due to power supply problems. Peru, which fell less than 1% that period compared to 2023, was slightly ahead.
