Investors pile into Peru’s $2 billion Michiquillay copper project

More than 20 companies are hoping to grab one of Peru’s hottest copper assets, as the country readies to auction off the rights to develop it in December, authorities said Monday.

The $2 billion Michiquillay copper project, located in the country’s northern Cajamarca region, was originally scheduled to be auctioned off next month, but state bidding agency Proinversión decided to push back the date so that interested companies have more time to submit offers, it said in a statement (in Spanish).

Companies have until Nov. 2 to sign up for the auction. A contract for the project, said the agency, will be awarded on Dec. 20.

Companies have until Nov. 2 to sign up for the auction and the winner will be announced on Dec. 20.

Michiquillay, projected to process close to 80,000 tonnes of copper ore a day, used to belong to Anglo American (LON:AAL), but the mining giant pulled out of the project in late 2014 due to capital constraints.

Milpo, controlled by Brazil’s Votorantim Metals, later evaluated the project. But the miner withdrew from Michiquillay in March this year after Proinversión asked Milpo to modify its proposal for the mine’s development.

At the time, the company said the proposed changes were not compatible with market conditions.

According to Proinversión, mineral resources at Michiquillay are estimated at 1.1 billion tonnes of copper with an average grade of 0.629% and a cut-off of 0.4% copper. The asset also holds gold, silver and molybdenum.

The project is the first sizable mineral deposit to be offered up in a public auction in Peru in more than ten years.

The timing couldn’t be better as copper prices are rallying. On Monday, the metal hit a fresh three-year high at $7,111.50 per tonne on bullish Chinese economic data.

While the government didn’t reveal any bidder’s name, precious metals miner Buenaventura has publicly expressed interest in Michiquillay, adding it could develop it by sharing infrastructure with two other proposed mines in the northern region of Cajamarca – Conga, owned by Buenaventura and Newmont Mining, and the China Minmetals copper-gold project Galeno.

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