Chinalco Mining Halts Peru Project Due to Alleged BreachBloomberg News
Chinalco Mining Corp. International, a unit of China’s biggest aluminum producer, halted mining at its Toromocho copper project in Peru because of an alleged environmental breach.
Chinalco Mining’s Peru subsidiary was notified by the South American nation’s environmental agency on March 28 of an alleged non-compliance with environmental laws on certain water discharges, it said in a statement to the Hong Kong stock exchange today. Mining will cease until the matter is resolved. Work at its processing plant and other ancillary operations won’t be affected, the company said.
The Toromocho project started initial production in December 2013 and is scheduled to reach full production in the third quarter of this year, the company said. Copper is the worst performer on the London Metal Exchange this year as demand from top consumer China slows.
“So far, the halt of the mining operation won’t affect the schedule of reaching full capacity,” Yuan Li, spokesman for parent Aluminum Corp. of China, said by phone. He didn’t give an estimate for how long the stoppage will last.
Chinalco Mining jumped 7.5 percent to HK$1.01 in Hong Kong today, rebounding from a decline of as much as 16 percent earlier in the day, its biggest drop since its debut on Jan. 31, 2013.
Chinalco’s local unit complied with a March 28 order to stop discharging waste water into two lakes in the Morococha district of central Peru where the mine is located, the Peruvian environmental agency said March 29.
The agency “will continue to monitor compliance with the order with the aim of protecting the environment,” according to a statement on its website.
Copper output from the $2.2 billion mine may reach 120,000 to 150,000 metric tons this year, compared with a previous forecast of 190,498 metric tons, Chinalco Mining said Dec. 11.
Chinalco was the biggest investor in Peru’s mining industry last year after Glencore Xstrata Plc, spending $1.2 billion, according to the country’s Energy and Mines Ministry. Peru is the world’s third-largest copper producer, having mined 1.38 million metric tons in 2013.
Global consumption of the metal will trail production by 81,000 metric tons in 2014, after a supply deficit of 175,000 tons last year, Barclays Plc said on Feb. 12.
— With assistance by Helen Yuan, and John Quigley