Peru Plans $1 Billion North Andean Railway For Minerals

Peru's government is studying plans to construct a railway to transport base and precious metals from the mineral-rich northern Andes to the country's Pacific coast.

President Alan Garcia said late Friday that the project could cost around $1 billion.

He said the project will likely to be completed over the next decade, and could help add 2 percentage points to Peru's gross domestic product. He said the railway, which could also carry fuel back to Andean mines, could create 500,000 jobs.

The train will run from the northern Andean city of Cajamarca, near large mining projects, including the Yanacocha gold mine, a joint venture of Denver-based Newmont Mining Corp. (NEM) and Peru's Compania de Minas Buenaventura SAA (BVN), to the northern coastal Bayovar port.

Exploration projects in the area include Rio Tinto PLC's (RIO.LN) La Granja mine and Anglo American PLC's (AAUKY) Michiquillay copper project.

Peru is the world's top silver miner and a major producer of gold, copper, zinc and other metals.

-By Leslie Josephs; Dow Jones Newswires; 511-98853-8610; [e-mail]