Capex for Peru's Zafranal copper project expected to top US$1.5bn, says source

Capex for the Zafranal copper project in Peru’s Arequipa region is expected to rise from US$1.26bn to US$1.5bn, according to a source. 

Operator Minera Zafranal, owned 80% by Canada’s Teck and 20% by Mitsubishi Materials Corporation, is in the process of selecting the company that will be in charge of detailed engineering starting in the first half of 2024.

According to a sector executive who preferred to remain anonymous, the current capex estimate falls short of requirements. "There is the possibility that they will look for another partner or ask Mitsubishi to increase its share," the source told BNamericas.

A Teck presentation earlier this month says construction of Zafranal will go from 3Q25 to early 2028 with production starting in February or March of that year. Production is expected to be 76,000t/y of copper and 29,000oz/y gold over the 19-year mine life.

In its presentation, Teck puts Zafranal’s production at 133,000t/y copper equivalent in the first five years and says project economics are being updated. 

In the industry there is a rumor that Teck could sell its share in Zafranal because its focus in the short term is to carry out an expansion of the US$8.8bn Quebrada Blanca phase 2 copper mine in Chile.

BNamericas could not immediately contact Teck for comment.

The Vancouver-based miner announced last week that it will sell a majority stake in its steelmaking coal assets with an enterprise value of US$9bn to Swiss company Glencore, plus a minority share to Nippon Steel Corporation.