Southern Copper Expansion Projects - First Look at MMF 2024 PDAC

This is a preview of what’s being discussed at Mexico Mining Forum 2024 PDAC. Don’t miss our upcoming interviews with panelists and guests to get more industry insights. 

 

Aiming to harness increasing mineral demand, Southern Copper, a subsidiary of Grupo México has been heavily investing in consolidating its Mexican and Peruvian assets with over US$15 billion over the past decade. Its portfolio includes projects such as Buenavista Zinc and Pilares, in Mexico, as well as Tia María, Los Chancas, and Michiquillay in Peru. These projects are part of the company's strategy to increase production capacity and meet the growing demand for minerals.

In Mexico, Southern Copper has made significant progress. The company reached full capacity at its Pilares project and began commissioning the zinc concentrator at the Buenavista del Cobre mine in Sonora in 2023. These projects are expected to contribute 44,000t of copper and 55,000t of zinc to Southern Copper's mining production in 2024.

The Buenavista Zinc project, located in Cananea, Sonora, is a key focus for Southern Copper. The project involves the construction of a new concentrator with a production capacity of 100,000t of zinc and 20,000t of copper per year. Once operational, this facility will double zinc production capacity and provide over 2,000 jobs at the operation site. The budget for this project is US$439 million, with the majority already invested.

The commissioning process for the new plant has reached 99% completion. Startup operations commenced in 1Q24, following necessary technical adjustments to the concentrator. Anticipated production figures for 2024 are promising, with expectations set at 54,500t of zinc and 11,900t of copper. Looking ahead, the plant is projected to maintain a robust output, averaging 90,200t of zinc and 20,700t of copper annually over the next five years.

Another important project is Pilares, also located in Sonora, near La Caridad. Pilares is an open-pit mine with an annual production capacity of 35,000t of copper concentrate. This project is expected to significantly improve the average mineral grade, considering the expected copper grade of 0.78% in Pilares, compared to 0.29% in La Caridad. The development budget for Pilares is US$176 million, with US$145 million already invested. Pilares delivers copper to the La Caridad concentrator. The company aims to make Pilares another separate operation, part of Southern Copper's project portfolio.

Peruvian Operations
Tia Maria, located in Arequipa, Peru, plans to produce 120,000t of copper cathodes annually using environmentally friendly technology. The project's estimated capital budget is US$1.4 billion and is expected to create 9,000 direct and indirect jobs during its construction phase.

Los Chancas, located in Apurímac, is a copper and molybdenum porphyry deposit with estimated and indicated mineral resources of 98Mt of oxides and 52Mt of sulfides. The project aims to produce 130,000t of copper and 7,500t of molybdenum per year through open-pit mining and processing. The estimated capital investment is US$2.6 billion, with operations expected to start in 2030.

Michiquillay, located in Cajamarca, is a world-class mining project with inferred mineral resources of 2,288Mt of copper. Once developed, Michiquillay is expected to produce 225,000t/y of copper, along with molybdenum, gold, and silver by-products. The project requires an investment of approximately US$2.5 billion, with production expected to start in 2032.

Southern Copper is committed to social and environmental improvements for local communities and is working with Peruvian authorities to address illegal mining activities. The company's Peruvian projects are expected to generate significant economic opportunities and contribute to local development through job creation, taxes, and royalties.