(06-01-2025) Compañía de Minas Buenaventura S.A.A., Lima, a local precious metals producer, has been awarded the development of the polymetallic El Algarrobo project in the locality of Tambogrande, Piura, for a total amount of US$ 2.753 billion by the Agency for the Promotion of Private Investment (PROINVERSIÓN).
This amount includes US$ 759 million in investment and US$ 1.99 billion in operating expenses over the first 10 years.
El Algarrobo is a polymetallic project focused on the extraction of copper, zinc, and silver, which would initially reach a production of 5,000 tpd, capacity that will be increased to 15,000 tpd. The exact capacity will be determined through feasibility studies.
The self-financed private initiative titled “Social Management, Design, and Execution of Hydraulic Infrastructure Projects, Construction, Implementation, and Operation of the Mining Concessions comprising the TG-3 El Algarrobo Deposit” was proposed by Compañía de Minas Buenaventura in September 2024.
After the 90-day period following the declaration of interest and the absence of competing proposals, the project was directly awarded to the proponent who will develop it in Tambogrande, Piura.
The first stage of the project will prioritize social engagement with the associated community, focusing on reaching agreements for the execution of a water infrastructure project. Subsequently, exploration activities will begin, along with the preparation of bankable feasibility studies, environmental impact assessments, and construction engineering, which pertain to the commercial stage of the project.
The initiative will conclude with mine closure engineering planning to ensure the rehabilitation of the affected area after operations cease.
According to PROINVERSIÓN, the project will contribute to the economic reactivation of the region, especially in the agricultural sector, and will strengthen Peru’s position in the global mining rankings. Plans include the establishment of Participatory Monitoring Committees composed of local representatives, who will oversee environmental aspects such as water quality and communicate monitoring results to the community.
El Algarrobo also involves the creation of a social fund to manage contributions derived from the contractual commitments made by the investor. These funds will be allocated to implementing social programs benefiting communities within the area of influence. Additionally, revenues from mining royalties will boost subnational government budgets, with particular attention to the directly affected areas.
The project will be carried out under a Mining Concession Transfer Option Contract, managed by the state-owned company Activos Mineros S.A.C., in compliance with Article 165 of the General Mining Law. The process has received favorable opinions from the Ministry of Energy and Mines and the Ministry of Economy and Finance.
The awarding ceremony was attended by the Minister of Energy and Mines, Jorge Luis Montero, and PROINVERSIÓN’s Executive Director, José Salardi.
Winners
Eng. Roque Benavides, Chairman of Buenaventura’s Board of Directors, highlighted that the company’s proposal for the El Algarrobo project not only involved significant investment in fixed infrastructure but also in the project’s operation over the years.
“We were the only bidder. We know the area because we have a mining property 7 kilometers away, which led us to explore other alternatives”, he said during an interview with the Peruvian Institute of Mining Engineers (IIMP).
“We knew that the TG3 deposit was under ProInversión’s control, so we submitted a private investment initiative. ProInversión, after evaluating our proposal and inviting other bids, ultimately awarded us this tender”, he added.