Southern Copper Corp. (SCCO) won the public bidding process for the Michiquillay project in Cajamarca, Peru, according to ProInversion, the government’s investment agency. SCCO offered $400 million for the transfer price and 3% for contractual royalties for the Michiquillay project that has mineral resources of 1.15 billion tons and a copper grade of 0.63%.

“We believe that Michiquillay not only offers us a unique and very appealing opportunity for growth, but is also an excellent strategic and operational complement that fits perfectly into our portfolio of mining projects in the Americas, and especially in Peru,” the company said in a statement.

The project is estimated to produce 225,000 tons of copper per year — along with byproducts such as molybdenum, gold and silver — for an initial mine life of more than 25 years. The estimated capital investment hovers around $2.5 billion, SCCO said. Michiquillay will start production in 2025 to become one of the largest copper mines in Peru, the company added.

SCCO is 88.9% owned by Grupo Mexico. The remaining 11.1% ownership interest is held by the international investment community. The SCCO operates mining units and metallurgical facilities in Mexico and Peru and conducts exploration activities in Argentina, Chile, Ecuador, Mexico and Peru.