Name and Location
Las Bambas copper project, Apurímac region, Peru.

Client
China’s MMG bought Las Bambas for $7-billion from Glencore Plc in August this year.

Project Description
Las Bambas will be a world-class copper mine, with an initial production of 400 000 t/y of copper in concentrate, including significant gold, silver and molybdenum by-products, as well as first-quartile cash costs.

Ore will be mined at a rate of 51.1-million tons a year from three openpit mines (initially the Ferrobamba and then the Chalcobamba and Sulfobamba pits) and processed in a 140 000 t/d sulphide grinding/flotation concentrator.

The $1.47-billion Antapaccay expansion to the Tintaya operation paves the way for the development of the major Las Bambas greenfield project.

Located 150 km apart, the Las Bambas and Antapaccay projects will benefit from important synergies. Concentrates from Las Bambas will be pumped through a 215 km pipeline to a molybdenum and filter plant, close to Tintaya-Antapaccay, and then transported on the same railroad to the Matarani port.

Value
The Las Bambas capital budget has been established at $7-billion.

Duration
Production has been delayed to 2016.

Latest Developments
MMG has said that the sell-off in copper markets has done nothing to discourage completion of one of the world's biggest copper mines, costing $7-billion.

The massive Las Bambas mine in Peru acquired by MMG and minority partners in August 2014, is capable of yielding more than two-million tonnes of copper in its first five years and will begin production in early 2016, according to chief executive of MMG Andrew Michelmore.

Michelmore is counting on copper prices rebounding from current half-decade lows by then as consumers in China and elsewhere chip away at surplus inventories, creating strong demand for copper and lifting prices.

The mine is 80% finished, with the relocation of whole communities to a newly built town to make way for the operation under way.

"My own view is that copper (supply) will be tightening and sentiment changing in the second half of 2015," Michelmore contends.

"If anything, Las Bambas will be coming into the market just when the market needs those tonnes."

Analysts blame copper's descent to its lowest price since January 2009 on a mounting supply glut amid a sharp drop-off in demand for the metal, found in everything from water taps to high-tech gadgetry.

Michelmore's comments echo those of Anglo-Australian miners Rio Tinto and BHP Billiton. Both companies are amassing vast copper holdings in a push to capture a greater chunk of the $140-billion world market.

Separately and in joint ventures, Rio and BHP intend to mine millions of additional tonnes in coming years, despite seeing a market in oversupply.

Michelmore says falling oil prices is a boon for mining companies, such as MMG, that buy vast quantities of diesel.

"Declining oil prices? You take it and smile," he said.

Key Contracts and Suppliers
ThyssenKrupp Robins (overland conveyor) and Siemens Drive Technologies Division (gearless drive system for overland conveyor).

On Budget and on Time?
The capital budget for Las Bambas has increased by 7% to $5.2-billion. This includes a $130-million increase, as a result of uncontrollable cost increases arising from delays in the granting of permits, following the change in government, and an additional amount for community relocation, infrastructure costs and community agreements to mitigate the risk of further delays.

The project remains on track for commissioning at the end of 2014.

Contact Details for Project Information
Xstrata Copper, Domingo Drago, tel + 51 1 372 2233 or email ddrago@xstratacopper.com.pe; or Emily Russell, tel +56 2 478 2204 or email erussell@xstratacopper.com.
ThyssenKrupp Robins, tel +1 303 770 0808  or fax +1 303 770 8233.
Siemens media relations, Stefan Rauscher, tel 49 911 895 7952 or email Stefan.rauscher@siemens.com.