The Peruvian Ministry of Energy and Mines has recently announced the approval of the Sustaining Technical Report (ITS) for the proposed expansion of the Cerro Verde mine, a project valued at over US$600m.

Cerro Verde, located in the southwestern Arequipa region, is responsible for about 17% of the copper and 30% of the molybdenum produced in Peru. It ranks among the top five largest copper producers globally, with a production of 454 kt in 2023. The mine is jointly owned by Freeport-McMoRan (53.56%), Sumitomo Metal Mining (21%), Compañía de Minas Buenaventura (19.58%), and other shareholders (5.86%).

Cerro Verde has a daily processing capacity of over 400,000t. From 2026 to 2044, Cerro Verde expects its average ore production to reach 420,000t per day, which will allow the mine to maintain an annual production average of ~450kt. Mining activities are expected to end in 2052, when existing reserves are expected to be exhausted.

According to Peru's Minister of Energy and Mines, Romulo Mucho, this expansion project, combined with other development projects namely Cotabambas, Conga, Galeno, La Granja, and Michiquillay, will enable Peru's copper production to reach 4mtpy close to Chile's.

First Quantum Minerals (FQM) is also looking at to accelerate its copper projects in Peru (La Granja, Haquira, and Taca Taca), after losing the right to operate its Cobre Panama mine in Panama. However, Peru’s copper industry is suffering from a wide range of structural issues, including declining grades, water availability, infrastructure inadequacy, environmental disputes and conflicts with local communities which translate into frequent operational disruptions and stalling production.

In 2023, copper production in the DRC was nearly at par with Peru’s. With the expansion at Ivanhoe’s Kamoa-Kakula and CMOC’s Tenke-Fungurume, DRC will bypass Peru in 2024 and become the second largest primary copper producer after Chile.

The Peruvian copper industry outlook remains uncertain unless Peru changes dramatically its mining policies and create a stable environment to encourage long-term commitments to mining projects, all issues being primarily driven by politics.