MercoPress. South Atlantic News Agency

Peru and Xstrata sign 4.2 billion USD deal to develop copper mine

“The contract of the century”, according to President Alan Garcia

Switzerland's Xstrata mining group and the Peruvian government Thursday signed a 4.2-billion-dollar deal to develop a copper mine in the southeastern Peru of the country, said President Alan Garcia.

“This is a historic day. This is the contract of the century” Garcia said of the deal expected to create 1,350 permanent jobs and yield 400,000 tons of copper concentrate and byproducts, including gold and silver, per year.

Xstrata's Las Bambas mining project covers a 35,000-hectare area in the Apurimac region 800 kilometers southeast of Lima. Work at the site is slated to begin in late 2011, with full production expected three years later. The life span of the mine is estimated in 18 years.

Garcia said Xstrata was a modern, environmentally responsible company that will generate employment and revenue that will go to help Peru's more needy regions. He added the deal will help keep Peru among the world's top copper producers and boost its development. It is currently second to Chile in copper production.

Xstrata Copper chief executive Charlie Sartain said the company won the rights to explore Las Bambas in 2004 and it has since worked with local communities, suppliers and national and regional authorities to advance the project.