PROINVERSIÓN INCORPORATES IN ITS PORTFOLIO THE EXPANSION OF BAYÓVAR PHOSPHATE FOR US$ 940 MILLION
Lima, May 13, 2024.- The Private Investment Promotion Agency (PROINVERSIÓN) added to the 2024 portfolio the opportunity to exploit phosphate rock in the Bayóvar No. 9 concession, which would generate investment commitments of US$ 940 million and would be oriented, among others, to promote non-metallic mining for the country's agricultural expansion.
The signing of the addendum to the contract for the expansion of Bayóvar phosphate could take place in the third quarter of 2024 through the Projects in Assets (PA) mechanism.
It should be noted that the project, located in Sechura (Piura), is being carried out by the company Fosfatos del Pacífico S.A. (FOSPAC) - a subsidiary of Cementos Pacasmayo - which has been in charge of the exploitation of diatomites since the award made in 2007.
In this case, the project included in the promotion portfolio arises from the structuring of the transfer contract of the Bayóvar Mining Concession No. 9 made by PROINVERSIÓN, in which it was foreseen that if the concessionaire discovered another mineral substance -in this case, phosphoric rock- it could be valorized based on studies to be carried out by the concessionaire itself.
Precisely, the concessionaire (FOSPAC) has developed studies that have identified the existence of significant reserves of phosphate rock and has proposed to carry out, within the same Bayóvar concession No. 9, a project for the production of this non-metallic mineral for direct application as fertilizer in agriculture.
The Project Director of PROINVERSIÓN, Rogger Incio, explained that an addendum to the concession transfer contract signed in 2007 must now be prepared in order for the exploitation of the phosphate rock to be carried out, which must be approved by the agency's Board of Directors, after the internal process of issuing reports for approval and support, which could be signed in the third quarter of 2024.
As a result of the negotiations conducted by PROINVERSIÓN, the company FOSPAC is committing to an investment of US$ 940 million over a period of 10 years, with a significant economic impact for the Peruvian State, as well as for the peasant community of San Martín de Sechura (Piura) for the deferred consideration agreed, in addition to the royalties of law and the consequent generation of a source of employment.
The project will be executed in two stages: first, the company will produce 100 thousand tons per year in the fifth year after signing the addendum. Second, by the tenth year, it should produce 2.5 million tons, increasing the country's phosphate rock production by 50%.
Rogger Incio commented that the project will have a great dynamic effect on the country's economy and will also facilitate the expansion of agricultural production. “This type of product is in demand in the local market; in fact, in the jungle it has been identified that its application can be direct, as well as in the development of modern agriculture in the valleys and intervalleys of the Peruvian coast that will be expanded by irrigation megaprojects,” he said.
Source: Press Release – PROINVERSIÓN