Southern Copper’s $1.8B Tía María Mine Gets Green Light for Development

Southern Copper’s Tía María Mine Gets Green Light for $1.8B Copper Project

Southern Copper (NYSE, LON: SCCO) has secured a crucial mining licence for its $1.8 billion Tía María copper project in Peru. This marks a significant step forward after years of delays caused by social unrest and political challenges. The Peruvian Ministry of Energy and Mines (Minem) approved the licence last week, allowing the project to enter the exploitation phase.

Located in the Islay province of the Arequipa region, Tía María is expected to breathe new life into Peru’s mining sector. The approval could also unlock other stalled copper developments across the country. The mine, once completed, will help solidify Peru’s position as the world’s third-largest copper producer.

Challenges Overcome: Tía María’s Long Journey to Approval

The Tía María project has faced significant opposition, particularly over environmental concerns. Protests from local communities between 2011 and 2015 led to six fatalities and forced the suspension of the project. Despite the government’s approval of the mine in 2019, progress was contingent on restoring social stability in the region.

In 2024, Southern Copper resumed development work, with local tensions easing enough for the company to move forward. With the mining licence now secured, the company can begin pre-mining activities, such as pit stripping and site preparations. As of July 2024, 90% of the initial construction, including access roads and platforms, had been completed. The project is 25% complete overall, with a focus on auxiliary facilities and the treatment plant.

Tía María’s Economic Impact and Project Timeline

Tía María is slated to begin production by late 2026 or early 2027. The mine is expected to produce 120,000 tonnes of copper annually over its projected 20-year lifespan. This significant output will further bolster Peru’s position as a global leader in copper production, contributing to the country’s standing as the world’s third-largest copper producer.

Southern Copper’s Peru operations currently rank as the country’s second-largest copper producer, having produced 414,000 tonnes of copper in 2024. However, the broader mining industry faces constraints, with numerous copper projects stalled due to social, environmental, and governance issues.

SuperMetalPrice Commentary: A Turning Point for Peru’s Copper Industry

The approval of the Tía María project represents a turning point for Peru’s copper industry, which has faced mounting challenges in recent years. While the project’s approval signals a positive development, the country’s broader mining landscape remains constrained, with a significant portion of untapped copper production capacity still “off-market.” This reflects ongoing social and environmental hurdles that could limit future growth in Peru’s mining sector.

Southern Copper’s ability to navigate these challenges and continue its development at Tía María will be critical for the company and the Peruvian copper industry. However, the country’s wider mining projects, including the Michiquillay and Los Chancas mines, remain at risk from issues like illegal mining invasions and lack of governmental support. As the copper market continues to evolve, investors and industry players will need to monitor Peru’s mining policies and political climate closely.