Peru pulls permit for $1.8B Tia Maria copper mine

Peru has revoked Southern Copper’s (NYSE, LSE: SCCO) permit for its $1.8-billion Tía María project, forcing a fresh review of one of the country’s most contentious copper developments.

The Ministry of Energy and Mines (Minem) said the original approval lacked legal justification and failed to meet requirements under mining and administrative regulations, while also flagging incomplete technical plans, including waste dump design and project scheduling.

“This process will reassess the project’s technical viability and determine whether outstanding observations have been resolved,” the ministry said.

Tía María was expected to begin production by the end of this year or early 2027, delivering 120,000 tonnes of copper annually over a projected 20-year lifespan, though the permit revocation now clouds that timeline.

Stalled projects

The decision represents a fresh challenge for a project long stalled by conflict, after protests between 2011 and 2015 left six people dead and halted development.

The government approved the mine in 2019, but it tied progress to the restoration of social stability. Southern Copper resumed development in 2024 after local tensions eased. By October last year, the company calculated the project was 23% complete.

The new setback reflects broader challenges for the sector, with an estimated $7 billion in copper projects stalled by illegal mining activity, while illicit gold exports could reach $12 billion in 2025, according to the Peruvian Institute of Economics.

Peru polls

The move also lands amid political uncertainty, with Peruvians set to elect a new president on Sunday, and Congress following years of instability marked by multiple leadership changes since 2018.

The outcome could shape foreign relations and investment flows as the U.S. seeks to secure critical mineral supply chains and counter China’s growing influence in the region.

Souther Copper, controlled by Grupo Mexico, operates the Toquepala and Cuajone copper mines as well as the Ilo refinery in southern Peru. 

Shares in Southern Copper gained 1.9% to $191.61 apiece on Friday afternoon after Goldman Sachs upgraded the stock in a note before Peru’s move on the permit.