Chinese, US firms line up for Peru copper projects as government cuts red tape

By Marco Aquino

LIMA, Sept 25 (Reuters) - Peru expects to boost annual copper production by about 1 million metric tons within 5 to 6 years through new mining projects, as Chinese and US companies weigh investments amid broader competition for critical minerals in South America, Peru's Energy and Mines Minister told Reuters.

Peru, the world's third-largest copper producer, expects output to remain between 2.5 million and 2.7 million tons this year, roughly unchanged from 2023 due to declining ore grades and recurring social conflicts, Minister Guillermo Shinno said.

The newly elected conservative government of President Keiko Fujimori is seeking to reverse that stagnation by cutting red tape.

In the two months since the Fujimori administration took office, mining companies have stepped up engagement with the ministry as they seek to revive stalled projects, Shinno said. Companies including from China, Peru's largest copper customer, and from the US as Washington seeks to expand its footprint in critical mineral supply chains, have expressed interest.

"Expectations are enormous. Everyone has been asking questions and coming to the ministry to see how they can move forward with their projects," Shinno said in an interview with Reuters late on Thursday.

CUTTING BACK SOME REQUIREMENTS

The minister said the government was committed to reducing roughly 100 permitting requirements across the mining sector to attract investment.

"We have identified 27 permits that could be eliminated," the minister said. "This is not about lowering environmental standards, but about being rigorous and very clear."

About 70% of Peru's $64 billion mining project pipeline is tied to copper, Shinno added.

Most of the roughly $7 billion in mining investment expected in 2026 is aimed at sustaining operations or extending mine life, rather than adding significant new output.

"With the new projects we have planned, in five or six years we could add another million tons of copper production per year," Shinno said.

CHINESE, US FIRMS EYE PROJECTS

Among roughly 20 companies that have met with the new administration are Chinese firms such as MMG 1208.HK, which owns Las Bambas, Chinalco, Shougang and Jinzhao, US-based miners Newmont NEM.N and Freeport-McMoRan FCX.N and global mining companies First Quantum FM.TO, Barrick ABX.TO, Anglo American AAL.L and Glencore GLEN.L, ministry records show.

Shinno said First Quantum wants to advance its La Granja copper project, while Chinalco in July acquired the Los Calatos project in southern Peru, which is undergoing environmental studies ahead of development.

First Quantum representatives in Lima did not immediately respond to a request for comment.

The government estimates investments of $2.4 billion for La Granja and $655 million for Los Calatos in the coming years. The Toromocho mine, operated by Chinalco, and Las Bambas are among Peru's 6 largest copper mines.

Shinno said he also expects greater US mining investment as Washington seeks to counter Chinese influence in strategic minerals. The US and Peru signed a critical minerals cooperation agreement in February, which US Secretary of State Marco Rubio highlighted during a visit to Peru this month as a way to capitalize on new opportunities in the sector.

"We hope that more American companies will be encouraged to come," Shinno added.