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Buenaventura, Peru, seeks to unlock $2.7 Billion mine project through water deal

Buenaventura, Peru, seeks to unlock $2.7 Billion mine project through water deal

Buenaventura is one of Peru's biggest mining companies. On Tuesday, it signed a water agreement with the government in an effort to develop a large copper project, at a time when production of the red metal has been declining.

Proinversion, a state-run agency which signed the contract with Buenaventura, estimated that investment in the Algarrobo mine and water infrastructure project in Peru's northwest Piura Region could reach 2,77 billion dollars over a period of 10 years.

The project depends on an agreement reached between the company, the neighboring communities and the Tambogrande District. This would guarantee the district's water supply, which is often scarce in high-altitude Andean areas.

Delays of years are often caused by local opposition to mining concessions. Buenaventura said it could take three years for the company to begin the necessary studies for its Algarrobo Project.

The first step in the process is to create a solid agreement between communities and local authorities. Aldo Maa, Buenaventura’s Vice President of Business Development and Marketing said that this will lay the foundation for a comprehensive underground copper mining project.

Analysts and industry data indicate that Peru is encouraging copper project development because its production has stagnated as a result of a lack investment and declining ore grade at major mines.

Peru is now ranked third in the world for copper production. The Democratic Republic of Congo has surpassed it. Chile is still the world's largest copper producer.

Freeport McMoRan operates the largest copper mine in Peru. Buenaventura owns 19.58% of this mine. Reporting by Marco Aquino, Editing by Leslie Adler

(source: Reuters)