Grupo México SAB de CV-owned Southern Copper Corp. won a tender to develop the Michiquillay copper mine in Peru, Reuters reported Feb. 20.

Southern Copper's proposal included the transfer of US$400 million to the government and the payment of 3% royalties, beating Cía. Minera Milpo SAA's offer of US$250 million in transfers and 1.875% in royalties.

About half of the transfer payment will go to a fund dedicated to social projects in the Cajamarca area, said Alberto Ñecco, director of state investment agency Proinversion.

The government-led auction attracted only two bidders. Eight of the 10 companies that submitted pre-registration documents pulled out of the bidding, including local affiliates of Rio Tinto and Teck Resources Ltd., and Peru's Cia. de Minas Buenaventura SAA.

In December 2014, Anglo American Plc withdrew from the project, saying the prospective development of Michiquillay would be better served by different ownership.

Proinversion estimates that Michiquillay will require about US$2 billion worth of investments to develop the project's 1.16 billion tonnes of copper resources.

The government is planning to auction 15 projects that would cost US$10.35 billion this year, according to the investment agency.