In August 2004, our company obtained the exploration rights with a built-in option to acquire and operate the deposit. Our offer of US$ 121 million was three times the base price. Pursuant to the contract, we have paid US$ 92.5 million plus IGV (General Sales Tax) to date to the Peruvian government. Of this amount, we used US$ 47 million as an initial contribution to establish a fund known as the Las Bambas Mining Project Social Contribution Trust Fund. The local and regional authorities use this fund for sustainable development in the project's area of influence: communications, healthcare, education, tourism, industry, infrastructure and production programs.
The Las Bambas Mining Project covers 35,000 hectares that include the Chalcobamba, Ferrobamba, Sulfobamba and Charcas mining concessions. The copper deposits are "skarn" with probable porphyry-type mineralisation with sulphides, oxides and iron. In addition, it features an auriferous mineralisation with exploration potential.
The project is located in a remote region with the following socio-economic characteristics:
- A local economy based on a barter system
- Subsistence agriculture
- Scarcity of productive soil land
- Poorly developed access routes
- Illiteracy rate of more than 70 percent among local communities
- Informal property rights
- Communities not formally recognised
- Area of great cultural wealth in danger