Peru Copper Mining Projects

April 9, 2010: Peru Seen Consolidating World Number Two Position In Copper :Toromocho, Antapaccay, Las Bambas, Tia Maria, Quellaveco, La Granja
A number of major mining companies have projects underway and observers are confident that if the political situation remains under control, then Peru could consolidate its second place in global output. Source NASDAQ.com

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Peru Copper Mining Projects

Maps and News: Cuajone Mine.

Explore Cuajone, Torata, Moquegua, Peru through detailed Google satellite imagery. To Pan: click and drag the map. Take advantage of the search and zoom bars.
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Cuajone Copper Mine

Why PCU is in the long-term portfolio

I don't really talk about the long-term portfolio much, basically because it never changes and to paraphrase Warren Buffett the favoured holding period is forever. It's comprised of gold bullion, silver bullion and a few stocks, with the biggest stock holding as Southern Copper (PCU).

Why PCU? This is why:

MEXICO CITY, Oct 31 (Reuters) - Peruvian miner Southern Copper, one of the world's largest copper producers, announced on Friday it will pay shareholders a dividend of $0.34 per share on Dec. 5.

The company (PCU.N: Quote, Profile, Research), which is a unit of Mexican miner Grupo Mexico (GMEXICOB.MX: Quote, Profile, Research), also said etc etc yada yada continues here

PCU just keeps paying me money, that's why. Here's a chart that summarizes the cash dividends of the last five years.

That's U$7.38 in total (if you include the 34c payment to come in December 2008). I took position in the stock at a split adjusted $8 and bits thus we're getting close to that magic net zero price. So even though PCU has dropped a mountain from its highs of 2007 and 2008 ....

...I'm still a very happy holder overall. I think it was Livermore who used to say buy right and sit tight. A long-term portfolio is a different mindset. It has to be like that. DYODD, dude.

Reuters interviews the CEO of PCU and gets interesting comments

On this link right here, President and CEO of Southern Copper (PCU), Oscar Gonzalez Rocha, talks about the state of play in the company and the copper sector. I haven't seen the interview in English (yet), but here are the Gonzalez direct quotes from the interview as translated by me:

(On the $5.1Bn investment and expansion program at PCU for the next five years): "We think that due to the crisis our projects could move foward a little slower, but at the end of the day we hope to execute them."

"We do not anticipate the need for credit, as now the situation is very diffuclt due to the US problems, and we can develop the project from our income cash flow....but if it is necessary, togher with the board of diretcors we will see if we can take a little away from the dividend pool to complete the projects if it's difficult to get credit lines." Gonzalez then mentioned that the Tia Maria project (120ktpa Cu) is due online in 2010.

(On the current market prices): "Unfortunately prices (for copper) have dropped considerably, from U$3.20/lb to U$2.70/lb. This will definitely affect us because although this only started at the beginning of September and we don't know how long it will last, income will diminsh due to the lower prices." He then mentioned that cash cost was around $1/lb at present, the rise due to fuel and steel costs. Gonzalez said, "Up to now we believe our projects are feasible; if copper was priced at $1/lb they would not be feasible."

(On market demand): "There is still strong demand from Asian countries. We do not believe they are going to slow construction and technological advance, this different to the USA which is semi-paralyzed.......At the same time we have mines which are suffering from reduced mineral grades or are on strike such as at Cananea, and this copper that is not reaching the market makes supply slightly lower than demand. This will maintain prices."