An auction for the $2 billion Michiquillay copper project in Peru attracted 10 interested companies according to Peru’s government investment agency Proinversión with Southern Copper Corp declared the winner on Tuesday.
Reuters reports Southern Copper won the tender with a proposal to transfer $400 million to the government and pay 3% royalties. Southern Copper is controlled by conglomerate Grupo Mexico. Southern’s chief executive told Reuters in September that Michiquillay has arsenic impurities, requiring a “slightly higher” investment to clean up the area.
According to Proinversión, the other companies that pre-registered for the tender included Peru’s Buenaventura, local units of Rio Tinto, Teck Resources and Hudbay Minerals, as well as Compania Minera Milpo, a company controlled by Brazil’s Votorontim. Milpo had offered $250 million in transfers and 1.875% royalties. Eight companies did not end up bidding.
The Michiquillay copper project, located in the country’s northern Cajamarca region, was originally scheduled to be auctioned off in November, but Proinversión pushed the date back twice amid political turmoil in the South American nation.
Peru is the world’s second biggest copper producer behind Chile with annual output of 2.4m tonnes of the orange metal.
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