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Anglo's buying spree bags Peru copper
Allan Seccombe
Posted: Wed, 02 May 2007

[miningmx.com] -- IN the second acquisition in as many weeks, Anglo American’s new CEO Cynthia Carroll has edged out rival mining companies to buy Peru’s Michiquillay copper project for $403m, a mere week after the multi-billion dollar purchase of an iron ore project in Brazil.

Described by Carroll as being “one of the best undeveloped copper prospects in the world,” Michiquillay, a copper porphyry with gold and silver content, has been explored since the late 1950s.

It has a 544 million ton resource at a grade of 0.69% copper, up to half a gram of gold per ton and two to four grams of silver per ton, according to the Centromin website. Centromin is leading the privatisation of certain Peruvian mineral assets.
one of the best undeveloped copper prospects
Anglo won the tender and will pay $403m to the Peruvian government over the first five years of the project, half of which will go towards developing local communities.

Carroll, who took over leadership of one of the world’s largest resources companies from Tony Trahar in April, told shareholders at last months annual general meeting to expect changes during her tenure as Anglo aggressively follows its strategy of becoming a mining-focused company.

Trahar began a process of shedding non-core assets, including selling Anglo’s 51% stake in AngloGold Ashanti, the world’s third largest gold producer. The first tranche of that exercise is completed and Anglo will sell its remaining 42% in the next two years.

“The Board appointed me, as an outsider, to act as a catalyst for change and I intend to live up to that challenge,” Carroll told shareholders, adding that despite a project pipeline of $7bn and another $10bn in the wings, acquisitions were likely.

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“I should emphasise that the Board see these disposals, and the greater focus and coherence they create, as a foundation upon which aggressively to grow our remaining, core, businesses,” she said less than a month ago.

Asarco was the first to explore the Michiquillay project between 1959 and 1965. Japan’s Michiquillay Copper Corp. explored it in the four years to 1976 and conducted a feasibility study into a 40,000 tonnes per day open pit mine.

Centromin said there was 2.5km of tunnels for underground workings and 159 diamond drill holes totalling 41.6km have been sunk.

“Anglo American believes that there is significant additional exploration potential associated with this deposit,” Carroll said.

The project will join Anglo’s other Peruvian copper asset Quellaveco, for which a feasibility study will be completed in the first half of 2008.

Anglo will pay $1.5bn to take a 49% stake in MMX Minas Rio, which owns the iron ore project in the Minas Gerais state in Brazil, developing slurry pipelines and developing an iron ore terminal at Rio de Janeiro for cape-size vessels.

The first phase of the project will produce 26.5 million tonnes of iron ore, with start up in the fourth quarter of 2009. The project is in development phase and construction permits have not yet been awarded. The first phase of the project will cost $2.35bn, which will be funded through debt finance and shareholders’ equity.