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Wednesday, June 18, 2008

Peru's 'copper mountain' in Chinese hands

Peru's 'copper mountain' in Chinese hands

http://news.bbc.co.uk/2/hi/americas/7460364.stm

By John Simpson BBC News, Mount Toromocho


A look inside some of the Chinese mining operations in Peru

At 15,000 feet (4,600m), Mount Toromocho, 86 miles (138km) from Lima, is comparable to any mountain in Europe. It gets its name from its shape - The Bull With No Horns. And it is composed almost entirely of copper ore: two billion tonnes of it. It could become the most productive copper mine anywhere on earth. Now it belongs, in effect, to China. When open-cast mining begins, in three or four years, a Chinese mining company, Chinalco, will send the copper back home to be turned into electrical wire. The plan is to use it to carry out the electrification of the whole of China. Bargain The Peruvian government is happy with the $3bn (£1.53bn) that Chinalco will invest in the Toromocho mines. The Chinese will be even happier.

They have got themselves a bargain. The copper Chinalco extracts from Toromocho will cost something like US$410 (£210) per ton. Today, the price for copper on the London Metal Exchange was $8,255 (£4,220) - 20 times more. Chinalco stands to make a 2,000% profit on its investment.

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