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After five years, the mega mining project Quellaveco is finally launched, which will begin to have a macroeconomic impact in 2018. El Comercio talks with Mark Cutifani, CEO from Anglo American on the project and its next steps in Peru
What is the timetable for the $ 5,300 million that will be invested in the construction of the project? Could you see something this year?
The project will require about 400 million US dollars this year. In round figures, it will be between 1,000 and 1,300 million US dollars in 2019, in 2020 probably around 1,500 million dollars; in 2021, between 1,000 and 1,300 million US dollars, and finally the difference in 2022.
Is there an exact start date for the works?
Yes, yesterday [risas]. We have already invested in the community and the re-channeling of the river [Asana]. We did a preparatory work for the foundations of the factory and other sectors. We have already invested close to $ 500 million in project preparation and we have an onsite team that will accelerate this investment in the next three to four months.
It is estimated that 127,500 tons of rock would be treated per day. Is there room to increase that?
The operation has the potential to increase its daily rock processing by about 18% per day, adding up to 150,000 tons. We have the infrastructure and water to process this amount of material, but the limit to go beyond is the use of water. We have this space, but we have to study and make sure we have the right technology to produce that supplement.
In 2013, everything was ready to start the project, but it was postponed. What factors does it respond to?
The results of the exploration were very robust, to understand the deposit and its geology. Second, the support we have received from the government and the community has been critical in making the decision to move forward.
Third, the technical challenges we have solved are also essential, in terms of the technology we will be using. use in the project. And finally, the price of copper, which we believe has a strong future. It's close to $ 3 a pound, which is a good price to make that commitment. We believe that the future of copper is very strong, so it gives us confidence.
But the average price of copper in 2013 was about US $ 3.33 per pound and today it is US $ 2, 9. What is it? changed?
[Algo] very important. The price of copper before 2013 was much higher, between US $ 4 and US $ 5 per pound. Then 3.3 US $ was a disappointing price and what we had to do was find new or better technologies to improve profitability and justify the project. Even though the price is now below US $ 3, the substantial improvement we have made to produce more at a lower cost is very important in terms of solutions.
China's cooling and the risk of trade war are striking at the price of copper. Why be optimistic?
We have a long-term perspective for the price of copper. Difficult short-term trade negotiations can create volatility, but we believe that long-term fundamentals are very strong. Remember that copper is fundamental in today's lifestyle and, in particular, in the electrification that occurs everywhere in the world, from electric cars to mobile phones. Energy is needed in homes and copper is the key to the transmission of electricity. We recognize that from time to time there will be ups and downs; but in the long run we have a very competitive cost and we will be able to cope with difficult times.
Today, they estimate a cash cost of US $ 1.05 per pound. How much was the estimate in 2013?
It would have been about US $ 1.50, we do not have an exact estimate. But this is not only the "cost price" but also the cost of investment, which was also much higher. It's a combination of both.
Southern wanted to partner with you in Quellaveco, which would have been logical considering your operation in southern Peru. Why not seize the opportunity?
It is important to note that many agents proposed to be partners, and when we evaluated the orders, the Mitsubishi proposal was the most competitive and the most valuable one as a company. At one point, people from Southern Copper mentioned the possibility of doing something, but not in a way that would allow us to retain ownership of the project.
Our commitment to Peru is very serious, in the long run, and we see more potential. in other areas to expand our participation, so we did not want to reduce our commitment to Peru
Is there another project in sight?
Now we have no project nearby, but we are committed to exploring new copper projects, which is a strong commitment and we hope to talk about new opportunities. Exploring and finding opportunities takes time. A wish is one thing, but we do not have something concrete yet. Given the strong relationship we established around Quellaveco, we are certainly open to the extension of our relationship
How much do you invest in exploration now?
The budget varies between $ 5 and $ 10 million a year. A portion is used in areas adjacent to Quellaveco to understand the size of its reserves; and also in areas that we can manage a few kilometers from the project.
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