Anglo American touts Peru copper mine innovation

Anglo American is touting the innovation of its $5.5bn copper mine in Peru, where a left-wing political novice historically critical of extractive industries is close to becoming the country's next president.

London-headquartered Anglo American is about a year out from starting production on the 300,000 t/yr Quellaveco mine, the firm's largest greenfield project worldwide and its showcase for "smart mining".

"What we are doing here is showing how mining will be done in the future. Quellaveco is going to be a turning point," Anglo American Peru chief executive Tom McCulley told Argus.

Quellaveco, in the southern Moquegua region, ticks many of the boxes that rural schoolteacher Pedro Castillo, who is close to being declared winner of a 6 June presidential run-off, talked about on the campaign trail, including technology, environmental focus and relations with local communities.

Castillo stressed that mining would not be permitted in places where communities oppose it, specifically calling out Tia Maria, planned by Mexico's Southern Copper, and Minas Conga, belonging to-US based Newmont. Tia Maria development has been suspended since 2009, Conga since 2011.

Quellaveco will be the first mine in Peru, and the largest of Anglo American's mines worldwide, that will be fully powered by renewable energy, and the country's first completely digital mine.

In an agreement with France's Engie, Quellaveco will be powered with 187MW from a 260MW wind farm under construction in Ica to the north. Quellaveco will export copper from a terminal that Engie built years ago to bring in coal for a thermal power plant it operated in Ilo. That plant is now closed.

Quellaveco currently has five 327t autonomous or driver-less mining trucks and will eventually get to 30 trucks, Anglo American's first fully autonomous fleet.

"All of the information is integrated, from water reservoirs nearly 5,000m above sea level to the port in Ilo we will use to ship copper. We can see all the data, interpret it and make decisions in real time," said general manager Tito Cacho.

Quellaveco will become a technological hub for Peruvian mining and a trailblazer for the wider Andean region, Anglo American says.

Peru is the world's second largest copper-producing country after southern neighbor Chile.

The most ambitious part of Quellaveco so far may be water sustainability. While there have been some grumblings about its environmental footprint, Quellaveco has been free from social protests and is not among projects monitored by local mining-watch non-profit groups concerning water rights and other environmental concerns. Quellaveco is also not among the 60 active mining conflicts the government's ombudsman's office was following in May.

The mine will obtain 80pc of its water, or 18mn m3, from the volcanic-fed Titire river high in the Andes. The river has natural toxic concentrations of boron and arsenic, off limits for human consumption and agriculture, but suitable for mining. The remaining 20pc will come from rainwater – it has 1.4mn m3 of stored rainwater – and the Asana river, which has been channeled and diverted around the mine. A key component is the 60m m3 Vizcachas dam. Quellaveco will use 4mn m3, with the rest provided to local farming communities.

The community plan, including the water-use strategy, was initially approved in 2012 after more than 18 months of negotiations.

"If I look at all of the mines I have seen in the world, this is the first that I can say has followed a sustainable approach from the start. We are investing $400mn to protect water and the environment. This is unheard of in our industry," said McCulley.

Quellaveco has 1.3bn t of ore reserves containing 7.5mn t of copper with a 0.57pc grade, and a minimum mine life of 30 years.

By Lucien Chauvin