The project, which will be the biggest nonferrous metal mining endeavor to be embarked on by Japanese companies, will involve the development of the Quechua mine in the Peruvian province of Cusco and the Caserones mine in northern Chile. The annual ore output from these mines, for which 100 percent of the mining rights are controlled by the two firms, is expected to total 250,000 tons.

At the Quechua site, production facilities will be built as early as in 2010 to produce 70,000 to 100,000 tons of copper ore a year. The entire output will be shipped to Japan to be smelted into copper bullion, which will be mostly supplied to domestic users.

At the Caserones mine, copper ore production is slated to begin in 2011. The projected annual ore output of 110,000 to 150,000 tons will be processed into bullion at a smelting plant to be set up there for sales worldwide.

Because Pan Pacific produces copper ore at other mines, its total annual procurement is expected to reach 350,000 tons once the new mines go into full swing. The greater output acts as a strong stabilizing force in the Japanese market, benefiting such volume users as electronics parts makers. Japan's copper bullion consumption stands at roughly 1.25 million tons a year.

Pan Pacific ranks at the top of the 1 trillion ¥ domestic market, holding a 40 percent share. The company now procures 20 percent of the copper ore it processes from its own mines. Once the new South American mines come onstream, the figure is forecast to rise to 50 percent.

Copper is a main raw material of electrical wires, cellular phones, personal computers and automotive electronics. Partly driven by the surging demand in emerging economies, the price of copper bullion has shot up 2.6-fold in the past three years. Worldwide consumption of copper came to about 17 million tons in 2006, up 2 percent from 2005.

Source: Asia Pulse