Panoro Minerals Signs Molybdenum JV

JV Signed With Peru's Centauro

Canadian mineral exploration company, Panoro Minerals Ltd has signed a joint-venture agreement with Peru’s Chancadora Centauro for the development of the Antilla Copper Molybdenum Project in Peru.

Centauro will make cash payments of US$8 million to the Panoro and will invest US$17 million into the Antilla Project in order to earn 70% interest over a 30 month period. Centauro will pay $1 million upon signing, $4 million within 90 days and the final $3 million within 20 months. The US$17 million investment will be directed towards the completion of bankable feasibility studies on the project.

Panoro will use the cash proceeds from the Antilla JV agreement to advance its 100% -owned Cotabambas copper gold project where the company recently completed agreements with two local communities. The company is planning infill, step out and exploration drilling aimed at increasing the resource.

Xstrats To Spend $7 Billion To Boost Copper Production

Output To Rise By 60 Per Cent Over Four Years

The Chief Executive of Xstrata Copper has announced that his company is to spend $7 billion over the next four years to increase its copper production by 60 per cent.

Speaking at a copper conference in Santiago, Charlie Sartain said that the company intends to boost output to 1.5 million tonnes from 920,000 tonnes last year.

This year’s output should be marginally ahead of that in 2009, however the company is looking to spend $1.5 billion investment at its Tintaya mine in Peru, which will raise output by about 60 percent, and a $1.3 billion expansion at the Antamina mine, also in Peru, will boost production capacity by 38 percent, Mr Sartain said. The company also expects to develop its Las Bambas mine in Peru, for which it was awarded an exploration licence in 2004.

Xstrata’s Lomas Bayas mine in northern Chile will receive a $293 million expansion to reach full production by 2013.

Xstrata is the world’s fourth largest copper producer behind Codelco of Chile, Freeport-McMoRan of the US and Australia’s BHP Billiton.

See also: Xstrata submits study for $5.2 Billion Philippies Gold-Copper Project

Peru's Gold Output Up, Silver Down

Peru's Energy and Mines Ministry has reported that the country’s gold production for February was 522,373 ounces, compared to 495,337 ounces in February 2008 – rise of 5.5%.

The increase was attributed to higher output at the Minera Barrick Misquichilca mine, as well as at mines owned by Compañia Minera San Simon, Companña Minera Podersoa, Minera Suyamarca and Minera Laytaruma.

Peru also mined 9,596,228 ounces of silver last month, an 11% decrease compared to February 2009’s 10,819,793 ounces of silver were produced.

Meanwhile lead production declined by 11% over the past year, tungsten dropped by 2% and molybdenum rose 13% during the same period.

Southern Copper Sees Prices Remaining Strong In 2010

Southern Copper Corp - a subsidiary of Grupo Mexico - said on Tuesday it expects average copper prices of $3.25 per pound in 2010, as it expects demand to be boosted by emerging and developed economies.

The price of copper rose 140 percent in 2009 on strong Chinese buying and supply concerns, but fell 8.5 percent in January as rising inventories suggested demand outside China was weak. Current price is a little over $3 a pound.

"We believe that inventories of copper will start to die off during the year, reversing the last month's trend," Southern Copper's Chief Financial Officer Genaro Guerrero said on a conference call with buying from emerging economies like China supporting prices through this year. Mr Guerrero also said that he expected consumption to rise in developed countries.

Southern Copper estimates copper production for this year at 500,000 tonnes, slightly above the 485,376 tonnes it mined this year, with molybdenum production forecast at 18,500 tonnes, in line with last year's output. Zinc sales this year are expected to be around 110,000 tonnes and silver sales to come in near 16 million ounces.

The company's 2010 copper forecast does not include potential output from the Cananea copper mine in Mexico, which usually produces around 20 per cent of the company’s copper but which has been closed by a strike for two years. The company was not able to give an estimated date for production to re-commence at Cananea.

Earlier this week copper trader Mr David Threlkeld said he expected the price of copper to plunge to around $1 a pound as he believed there to be much higher inventories than have been reported.

Signs Of Recovery In Peru's Iron Ore Output

According to sources at Peru's energy and mineral department, the country's iron ore output was 429,000 tons in August, down 12.09% year on year. The cumulative production was 2.93mln tons in the first eight months of the year, down 16.73% year on year.

Although production in August was lower than the level in the same period last year, it represented growth compared with previous months this year.

Source: Alibaba

Trevali Commences Expansion At Peru Silver-Lead-Zinc Project

Trevali Resources Corp. in conjunction with partner Glencore International A.G. has successfully completed a positive internal mine development study examining initiating mining operations on the newly discovered Magistral deposits at the Santander polymetallic project in west-central Peru.

Trevali and Glencore have entered into a definitive development agreement for the Santander project that will see Glencore provide and operate a 2,000-tonne-per-day concentrate plant, undertake mining operations on a 'contractor/toll basis' and enter into a long-term concentrate offtake agreement for 100% of Santander project production at benchmark terms.

Trevalis Santander silver-lead-zinc mine project is located approximately 215 km by road from Lima, in the western extent of Peru's prolific Cerro de Pasco mineral district. The mine operated from 1958-1993 targeting a single Carbonate Replacement Deposit--type pipe and manto structure, the Santander Orebody.

Substantial site infrastructure at the formerly producing operation includes a fully refurbished 200-man camp and associated support facilities, an ore processing / concentrator plant (including various crushers, mills, flotation cells and filters able to produce zinc, lead-silver and copper concentrates) undergoing refurbishment, and the Tingo hydroelectric power-station located 17 km down-valley to the west. The Santander project and the considerable existing infrastructure form a highly strategic asset in this mining district. The Company commenced exploration at Santander in November 2007 discovering four new high-grade silver-lead-zinc replacement and massive sulphide bodies to date.

A recently completed independent NI 43-101 resource estimate of the three Magistral deposits by Golder Associates Engineers (see NR-09-06) reviews a total Indicated Mineral Resource of 5,298,000 tonnes with an average grade of 3.34% zinc, 1.27% lead and 38 g/t silver (using a 2% ZnEQ* cut-off grade) -- for a contained metal inventory of 390 million lbs. zinc, 149 million lbs. lead and 6.5 million oz. silver in the Indicated category. An additional Inferred Mineral Resource of 2,244,000 tonnes grading 2.92% zinc, 0.50% lead and 18 g/t silver was also reviewed in the three deposits using the same cut-off grade -- for contained metals of 144 million lbs. zinc, 25 million lbs. lead and 1.3 million oz. silver. All three Magistral bodies remain open at depth and to the East.

Additionally, a further 100 million contained lbs. of zinc are estimated to be present in the 1,656,000 indicated tonnes grading at 2.74% zinc (using a 2.0% zinc cut-off grade) within the Santander Tailings Impoundment.

Additionally, through its wholly owned subsidiary Trevali Renewable Energy Inc., the Company is undertaking a significant upgrade of the Tingo run-of-river hydroelectric generating facility along with transmission line upgrades and extensions to allow the potential sale of surplus power into the Peruvian National Energy Grid.

Source: Financial Post

Zibo To Pay Reduced Price For Peru Iron Ore Deposit

Cardero Resource Corp. said yesterday the price it will be paid for its Pampa de Pongo iron ore property in Peru has been cut in half to US$100 million.

The reduction came after the Chinese firm buying the property told the Vancouver-based company it would not proceed with the purchase unless the $200-million price tag was cut.

"The board firmly believes that accepting the offer of US$100 million is in the best interests of the company and our shareholders, given the current long term projections for the global iron ore markets," Cardero president and chief executive Henk Van Alphen said.

"The revised agreement will provide us with very significant amount of near term capital that may potentially be employed in new and strategic opportunities - instead of waiting an indeterminate amount of time for commodity prices to improve and hope to sell for higher price in the future."

Shares in the company, which had fallen sharply this week when the deal was in doubt, were up 24 cents of about 24% at $1.25 on the Toronto Stock Exchange.

Cardero said Zibo Hongda Mining Co., Ltd., a subsidiary of Nanjinzhao Group Co. Ltd., has paid the required $10 million deposit in addition to $2 million that was paid earlier.

The balance of the purchase price is due 10 days after Hongda receives the necessary Chinese governmental approvals to proceed with the purchase or Dec. 17, whichever comes first.

Cardero holds assets in the Marcona District of southern Peru, the Baja district of Mexico and in Minnesota.

Source: London Free Press, Canada

Peruvian Government May Close Doe Run Smelter

Peru’s government may close the Doe Run Peru smelter next year if its fails to meet an environmental clean-up deadline, Deputy Mining Minister Felipe Isasi said.

The Renco Group Inc. unit, which shut most of its smelting operations in March after banks cut off financing, is operating at 30 percent capacity, he told reporters today in Lima. The zinc and lead smelter has until October to complete an environmental program, he said.

“Under the legal framework, Doe Run Peru has to meet its environmental obligations by October,” Isasi said. “If it fails to comply, it may be shut down after a six-month audit.”

Banks froze Doe Run’s accounts on Feb. 24 after metals prices collapsed because of the global economic slowdown. Doe Run has failed to meet commitments established by an April $175 million bailout plan, Carlos Galvez, chief financial officer of Cia. de Minas Buenaventura SA, one of Doe Run’s chief creditors, said May 18.

Doe Run, which took over the smelter from the state in 1996, said it has invested $300 million in environmental improvements. Doe Run spokesman Victor Belaunde didn’t return calls and an e-mail seeking comment today.

Zinc and lead have both fallen at least 50 percent since March 2008. Peru is the world’s third-largest zinc producer and No. 4 for lead.

Source: Bloomberg

Japan, Peru To Start Trade Talks

Japan and Peru have agreed to start talks on a free trade agreement between Asia's biggest economy and the resource-rich South American nation, Tokyo said.

Japanese Prime Minister Taro Aso and Peruvian President Alan Garcia agreed in a telephone call to press ahead with the negotiations, Japan's foreign ministry said in a statement.

In November the two countries signed a bilateral accord on liberalisation and protection of investments, a core component of the potential trade deal.

Japan hopes that such a pact with Peru, which is rich with copper and zinc, will help it ensure stable procurements of mineral resources. Peru for its part wants to expand its access to Japan's farm and fishery markets.

It would be Tokyo's second such treaty with a South American country, following an earlier deal with Chile.

Japan has been seeking bilateral free trade agreements amid a breakdown in global trade liberalisation talks.

Source: AFP

Does Run Peru Smelter "Faces Problems"

Renco Group Inc.’s Peruvian unit said it is in talks with banks and mining suppliers about financing after a global credit crisis discouraged banks from lending.

The Doe Run Peru unit “faces temporary problems,” Victor Belaunde, a spokesman, said today in an e-mailed response to questions. The unit cut 1,100 subcontracted workers at its copper mine and zinc, lead and copper smelter in January, according to the Mining Federation.

The problems are “a consequence of the impact that the international financial crisis has had on the company’s operations,” Belaunde said. “Doe Run Peru is working with banks and mining-concentrates suppliers in search of solutions.”

Lima-based newspaper El Comercio reported today that the Peruvian government may bail out the company after a group of banks led by Peru’s Banco de Credito cut off a $75 million line of credit. Belaunde declined to comment on the report.

Banco de Credito spokeswoman Aida Kleffmann didn’t immediately return calls or an e-mail from Bloomberg News seeking comment. Fernando Mendoza, Finance Ministry spokesman, declined to comment when contacted by Bloomberg.

The smelter has shut zinc- and lead-processing plants for lack of concentrates, Roiberto Guzman, a Doe Run Peru metallurgical union spokesman, said by telephone from La Oroya.

“The company said it isn’t able to buy concentrates as it owes suppliers,” Guzman said. “It was also late paying workers’ wages.”

Doe Run’s La Oroya smelter, 140 kilometres (87 miles) east of Lima, last year refined 114,259 metric tons of lead; 43,440 tons of zinc; 53,831 tons of copper and 1.1 million kilograms of silver, according to the Energy & Mines Ministry. It also refines minor metals.

The company, which was Peru’s fourth-largest exporter with $1.45 billion in sales abroad in 2007, buys $1 billion of concentrates a year, according to Doe Run’s Web site.

SourcE: Bloomberg

Peru - No Plans For Copper Cartel

A top Peruvian mining official said on Thursday Peru had no plans to form a copper industry cartel with neighbour Chile, the world's largest producer of the red metal.

Copper prices have fallen 60 percent from record highs in July last year, turning many previously powerful copper companies on their heads as demand for the metal slumped in the global economic crisis.

"No, there is no such plan (for a cartel) at this moment," deputy mine minister Juan Felipe Isasi told reporters in Junin, 125 miles (200 km) east of the capital Lima in the Peruvian Andes.

His comments come after reports in the local and international media that Chile, the world's top copper producer, and No. 2 producer Peru could form a cartel in the style of the OPEC oil producing countries.

"There might be coordination (of policies) among copper producing countries to study industry issues to study whether some joint action could be taken, but it would be difficult to control international prices," Isasi added.

In Chile, some mine workers have called for No. 1 copper producer Codelco, a state company, to control copper shipments to the market to help bolster the price.

Source: Reuters

Peru Calls For Copper Cartel

Peru#s President Alan Garcia has called for Peru and Chile to work together to boost falling metal prices as the economic downturn has slashed demand for copper.


"When two close brother countries that produce copper compete, prices decline and both of them earn less," President Alan Garcia told reporters in Lima. "It would be a very important thing to lay out and coordinate our policies."

Peru and Chile are two of the world's tp three copper-producing countries and a copper cartel would aim to halt a slide in copper prices that has reduced mining profits and investment and caused a rise in unemployment.

In 2008 Chile produced 5.6 million metric tons of copper, while Peru produced 1.3 million metric tons. Prices have dropped by more than 60 percent since last year as economic turmoil slows global demand for the metal. Copper futures for May delivery closied at $1.54 per pound in New York on Friday.

The decline cut net income at Chile's state-run Codelco, the world's top copper miner, by nearly half to $4.5 billion in 2008; while Southern Copper Corp., one of Peru's biggest miners, posted a $125 million net loss in the fourth quarter, compared with a $311 million profit in the year-ago period.

Meanwhile, 9,000 miners have been laid off in Peru and new projects have been suspended, including Southern Copper's plan to invest $1 billion in the Tia Maria mine. The cutbacks already helped slow Peru's yearly economic growth rate to 5 percent in January.

The world's last copper cartel, the Intergovernmental Council on Copper Exporting Countries, was formed in the 1970s by Peru, Chile, Zaire and Zambia. It was dissolved in 1988 after limited success coordinating supply.

Miners previously worked together to set prices, with companies like Anaconda, once the world's biggest copper producer, joining the now-defunct International Copper Cartel in the 1920s.

Source: International Herald Tribune

Buenaventura Posts Q4 Loss

Peruvian miner Compania de Minas Buenaventura SAA announced on Thursday a loss of $6.1 million in the fourth quarter of last year as the global recession hit prices and sales of silver and base metals.

This compared to a profit of US$120 million in the same quarter of 2007.

Operational income fell 84 percent to $16.9 million in the quarter due to higher contractor expenses and falling prices of zinc, lead and silver.

Sales fell to $155 million, compared with $226.5 million in the same period a year earlier.

Production at Yanacocha, part-owed by Buenaventura and Latin America's largest gold mine, said income for the year was $153.3 million, down from $274.8 million in 2007.

Buenaventura is Peru's largest publicly traded precious metals company and a major holder of mining rights in Peru.

Peruvian Copper Production Up 25 Percent In January

The Peruvian government's Mining Ministry has released the country's mineral production figures for 2009. Copper, zinc and silver all rose - copper by over a quarter - compared to January of last year. However, lead production fell slightly.

The government relies on minerals for most of its revenues.

The figures along with a comparison with January 2008 are as follows:

Copper: 106,796 tonnes (up 25.89 pct),
Zinc: 136,531 tonnes (up 5.22 pct),
Gold: 13,853,518 fine grams (down 4.04 pct),
Silver: 307,166 fine kg (up 9.04 pct),
Lead: 27,038 tonnes (down 4.34 pct),
Iron: 336,253 tonnes (up 14.12 pct),
Tin: 3,434 tonnes (up 0.91 pct),
Molybdenum: 1,474 tonnes (up 85.41 pct)

Rio Tinto-Chinalco Deal

WEIPA, QUEENSLAND: Bauxite. 2008 output: 20,006,000 tonnes Sale of 30% stake worth $1.2 billion Queensland. Sale of 50% stake worth $500 million.

YARWUN, QUEENSLAND: Alumina refinery, output in 2008 1,293,000 tonnes. Sale of 50% stake at a price of $500 million. . Rio's revised stake will be 50%.

BOYNE ISLAND, QUEENSLAND: Aluminium smelter, output in 2008 552,000 tonnes. Sale of 29.40% stake to raise Chinalco's stake to 49% at a cost of $450 million with Gladstone Power deal. Rio's revised stake will be 30%.

GLADSTONE POWER, QUEENSLAND: Capacity 1680 megawatts. Sale of 20.6% stake to raise Chinalco's stake to 49% at a cost of $450 million with Boyne Island deal. Rio's revised stake will be 21.50%

ESCONDIDA COPPER MINE, CHILE: Output in 2008 992,400 tonnes of copper in concentrate. Sale of 15% stake to raise Chinalco's stake to 49.75%. Rio's revised stake will be 15%. Value of deal $3.388 billion

GRASBERG, PAPUA PROVINCE, INDONESIA: Copper and gold mine. Output in 2008: 467,500 tonnes of copper in concentrate and 1.1 million ounces of gold. Sale of 12% stake to raise Chinalco's stake to 30%. Rio's revised stake will be 28%. Value of deal $400 million.

LA GRANJA, PERU: Copper and zinc project. Resource: 2.8 billion tonnes of Inferred Resources; grading 0.51 percent copper and 0.1 percent zinc. Sale of 30% stake worth $50 million.

KENNECOTT COPPER, UTAH: 238,000 tonnes of copper in concentrate and 200,600
tonnes of refined copper. Sale of 25% stake worth $700 million. Rio’s revised stake will be 75%.

HAMERSLEY IRON, WEST AUSTRALIA: Sale of 15% stake worth $5.15 billion. 2008 OUTPUT: 95.55 million tonnes. Rio’s revised stake will be 85%/

DEVELOPMENT FUND 1: sale of 50% stake worth $500 million

TOTAL $12.338 billion.

Chinese Group To Expand Peru Iron Ore Production

The Chinese-owned mining company Shougang Hierro Peru is to invest $1 billion to expand production at its plant in southern Peru by 10 million tonnes per year, the company's chairman said.

"The investment of one billion dollars will help expand the plant's production capacity by 10 million tonnes per year," said Mr Wu Bin after meeting with Peru's President Alan Garcia.

He said he hoped the plant's expansion would be operational by the end of 2010.

Shougang Hierro Peru is a private company that extracts and processes iron ore. Its main mining and metallurgical operations are located 530 kilometers (330 miles) south of Lima in the San Juan de Marcona district, in Nazca province.

The company is owned by China's Shougang Group, which took over mining management and operations in January 1993. It is one of the top five exporters to China.

Source: AFP

Peru's Trade Surplus Falls Sharply

Peru's trade surplus more than halved to $3.16 billion in 2008 as worle metal prices fell, the country's central bank announced on Saturday. Peru is the world's second biggest copper producer.

The trade surplus for December 2008 fell sharply to $47 million from $1.02 billion in the corresponding month the previous year. Exports fell to $1.95 billion in December - a fall of over 30% - as mineral exports dropped sharply.

Peru's Miners Set To Strike

Peru's largest federation of mining unions said over the weekend it has agreed to call a nationwide strike starting on March 15, to protest mounting job cuts and to pressure Congress to lift caps on profit sharing.

Peru is the world's top producer of silver, No.2 in copper and zinc, and often ranks fifth in gold output.

The strike date was set at a membership meeting of the National Federation of Mine and Steel Workers, Peru's biggest organization of mining unions.

"The strike has been approved for March 15," Luis Castillo, the group's head told Reuters in a phone conversation.

Mine workers are upset by job cuts spurred by the global economic crisis, which has slammed prices for most of Peru's metal exports, the government's largest revenue source.

According to the mining federation, more than 5,500 workers have lost their jobs since December, while the Labour Ministry puts the figure at 4,000.

Unions also want better working conditions and for Peru's Congress to lift caps on profit sharing.

Last year, the federation held a nearly one-week strike, which hit some key mines and helped push global copper prices to record highs. The work stoppage had a minimal impact on production as managers called in temporary workers.

SourcE: Reuters

Southern Copper Posts Fourth Quarter Loss

Southern Copper Corp, the Grupo Mexico unit that is one of the world's largest copper producers, posted a fourth-quarter net loss on Friday and slashed its 2009 capital and exploration budget amid plummeting metals prices.

The company reported a net loss of $124.7 million, compared with a profit of $310.9 million a year earlier on net sales down to $449.7 million from $1.294 billion.
For the full year, Southern Copper said net profit totalled $1.406 billion, down from $2.216 billion in 2007.

Profit fell on lower copper prices, which have plummeted in the global financial crisis. The company said the crisis has caused it to scrutinise or stop new projects.
For 2009, Southern Copper slashed its capital and exploration budget to $415.3 million from a prior estimate of $1.07 billion.

The company is currently evaluating putting on hold or stopping its Tia Maria project and has delayed spending at its Toquepala mine expansion project. Its metals projects at El Arco, Los Chancas and Angangeo remain under evaluation.