AREQUIPA, Peru, Sept 23 (Reuters) - Peru, the world’s third-largest copper producer, will withstand slumping copper prices thanks to rising output from new projects and low operating costs that keep mining profitable, the head of country’s central bank said on Wednesday.
“There’s no need to be dramatic,” Governor Julio Velarde said in response to questions about the impacts of copper prices. The low cost of mining in Peru will keep copper miners here, even with the current price dip, he added.
“Companies can still offset their costs by leaps and bounds,” Velarde said. “That’s why miners, despite current prices, still want to roll out projects.”
Peru expects to nearly double its copper output in the coming years to 2.5 million tonnes in 2018, boosted by a handful of new projects.
Significant new output is expected from MMG Ltd’s $7.4 billion Las Bambas project and the expansion of Freeport-McMoRan Inc’s Cerro Verde mine.
MMG said earlier on Wednesday that it is on track to start commercial production in May or June of 2016 at Las Bambas and will ramp output up to 400,000 tonnes of copper in 2017.
“We expect the increase in the volume of mining production to partially offset the drop in prices,” Velarde said. “The contribution of mining to economic growth will be fundamental in the next three years.”
Reporting By Teresa Cespedes; Editing by Alan Crosby