Southern Peru Copper Corp. (SPCC) will proceed with a US$300-million capital investment program after settling a dispute with he Peruvian government over investment recovery contracts.
Under the terms of the settlement, SPCC will transfer US$55 million to the Peruvian government. Principal and interest on the deposit will be available to SPCC solely for use on the specified investment projects. The spending program is the company’s largest since the Cuajone copper complex was built in 1976 for US$727 million. Asarco (NYSE) owns a 52.3% interest in SPCC, while the remainder is owned by subsidiaries of the Marmon Group (20.7%), Phelps Dodge Overseas Capital (16.3%) and Newmont Mining (NYSE) (10.7%).
“The new investment program to be launched this year will permit SPCC to begin to regain its place as a competitive participant in the world copper industry,” said President Charles Preble. “(It) will increase Peru’s copper exports by 9% and will provide foreign exchange, tax revenue, and employment benefits for the country.”
The construction phase of the program is expected to create as many as 1,000 new jobs.
The US$300 million will be used to build solvent extraction-electrowinning (SX-EW) plants at SPCC’s two copper mines in southern Peru, Toquepala and Cuajone. SPCC will also build a 165,000-ton-per-year sulphuric acid plant to supply the SX-EW facilities. A waste water treatment plant and tailings disposal facility will also be installed.
The new plants will increase mine production by 39,000 tons per year and reduce sulphide emissions at the Ilo smelter. Approximately US$20 million will be spent every year for five years to renovate production equipment and introduce new technology.
SPCC employs 5,700 people at two mines and a smelter in southern Peru. In 1990, the company produced 210,000 tons of contained copper, two million ounces of silver and 5.5 million lb. of molybdenum.
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