Peru has revoked Southern Copper’s (NYSE: SCCO) permit for its $1.8 billion Tía María copper project, casting fresh doubt on a development already marred by years of conflict and delays.
The Ministry of Energy and Mines pulled the approval, citing a lack of legal justification and non-compliance with mining and administrative regulations. Incomplete technical plans, including deficiencies in waste dump design and project scheduling, were also flagged as critical issues. The ministry noted that a new review will evaluate the project’s technical viability and address unresolved concerns, though no specific timeline for this process was provided.
Tía María, located in southern Peru, has been a lightning rod for controversy. Between 2011 and 2015, violent protests against the mine left six people dead, stalling progress. While the government granted approval in 2019 with conditions tied to restoring social stability, Southern Copper only resumed work in 2024 after tensions eased.
By October last year, the company reported the project was 23% complete, targeting production of 120,000 tonnes of copper annually over a 20-year lifespan, with a potential start by late 2026 or early 2027. This latest setback now jeopardizes that outlook.
The revocation compounds broader challenges for Peru’s mining sector. An estimated $7 billion in copper projects remain stalled due to illegal mining activities, while illicit gold exports are projected to hit $12 billion in 2025, according to the Peruvian Institute of Economics. Southern Copper, a subsidiary of Grupo Mexico, also operates the Toquepala and Cuajone mines and the Ilo refinery in the region, making its role in Peru’s copper output significant.
Political uncertainty adds another layer of complexity. With a presidential election set for Sunday and years of instability in Congress marked by multiple leadership changes since 2018, the policy environment for foreign investment hangs in the balance. The outcome could influence Peru’s position in global critical mineral supply chains, especially as the US seeks to counter China’s growing foothold in Latin American resources.
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