MMG Ltd. reported on June 10 that Minera Las Bambas has entered into an agreement with Perurail for the transport of copper concentrates produced by the Las Bambas copper project in the Apurimac region of southern Peru. Las Bambas is a joint venture between MMG as the operator (62.5%); Guoxin International Investment Co. (22.5%); and CITIC Metal Co. (15%). Construction of the project is nearing completion. Production of first concentrates is scheduled for the first quarter of 2016.
MMG anticipates that Las Bambas will produce an average of more than 400,000 metric tons per year (mt/y) of copper in concentrates during its first five years of full production. Mine life is projected at more than 20 years.
As of January 1, 2014, Las Bambas had proven and probable ore reserves totaling 952 million mt, grading 0.72% copper and containing 6.9 million mt of copper, 167,500 mt of molybdenum, 1.9 million oz of gold, and 112 million oz of silver.
Las Bambas ore will be mined from three open pits. The concentrator is designed to treat 140,000 mt/d and has additional space within its footprint to increase grinding capacity. The plant will produce a copper concentrate containing payable gold and silver and a separate molybdenum concentrate. Processing will utilize conventional crushing, grinding, and flotation techniques.
An independent third party will provide truck haulage services for transport of concentrates from Las Bambas to a rail transfer station at Pillones. Perurail will transport the concentrates from Pillones to the Port of Matarani, a distance of approximately 295 km. The rail agreement is for a period of 15 years beginning January 1, 2016, with an option to renew for a further 15 years.
The total consideration payable by Las Bambas for the provision of rail services during the initial 15-year term is estimated at $489.3 million.
Prior to the signing of the agreement, Las Bambas had entered into purchase contracts for rail wagons, containers, turning equipment, and locomotives. This equipment will be sold on to Perurail for $76.1 million.