Commodities Buzz: Southern Copper says legal dispute over Perus Tia Maria resolved

Southern Copper Corps chief executive said on Wednesday it had reached a settlement with a company in Peru that blocked development of its $ 1.4 billion Tia Maria project with a legal injunction. Southern Coppers Oscar Gonzalez told Reuters he hoped the new government of Peruvian President Martin Southern Copper said in its earnings report earlier on that it believed Vizcarras government would work to ensure "equitable investment conditions" that allow construction of Tia Maria to start this year.

Sociedad Minera Vania, the company that had filed a lawsuit against Southern Copper arguing that the Tia Maria concession overlapped with land it controlled, did not immediately respond to requests for comment. Vizcarra would issue a permit "soon" to allow construction work on the long-delayed project to begin this year. It was unclear if Vizcarras administration believed the project had enough support from surrounding communities, however. Such support is critical and one of the biggest obstacles to mining investments in Peru, the worlds No.2 copper producer.

Tia Maria has been derailed twice in 2011 and 2015 because of deadly protests by farmers who fear the proposed open-pit mine will damage crops in the southern region of Arequipa. When asked about Tia Maria last week, Vizcarras prime minister said the government would not "impose" projects on communities. Southern Copper said in its earnings report earlier on Wednesday that it believed Vizcarras government would work to ensure "equitable investment conditions" that allow construction of Tia Maria to start this year.

Sociedad Minera Vania, the company that had filed a lawsuit against Southern Copper arguing that the Tia Maria concession overlapped with land it controlled, did not immediately respond to requests for comment. According to Martin Valdes, partner and managing director at Resource Capital Funds, a mining-focused private equity firm, copper grades have declined about 25% in Chile in the last ten years.