A recent report by the Peruvian Institute of Economy states that the country’s mining sector has seen a ‘concerning’ decrease in private investments.
According to the Institute, while the mining sector was responsible for 19% of total private investments in 2012, it now accounts only for 10%. This new baseline is similar to that of 2016, even though copper prices have doubled since then.
The report notes that civil unrest, particularly when it is spurred by difficult relationships between mining operators and the surrounding communities, is to blame for the dwindling initiatives led y private capital.
“Low mining investment is linked to the sustained loss of attractiveness the country has faced since 2018 and the increase in conflict seen in the last year,” the dossier, which was made public by local media, reads. “In Latin America and particularly among top mining economies, Peru is the country with the most conflicts and this indicator reduces companies’ interest to invest in the sector.”
Overall, private investment in Peru grew by 1% in 2022’s second quarter and the forecast is that it will go up only by 2.2% by the end of the year, lagging behind other mining countries such as Chile and Mexico.
Despite the downward trend in private investments, the Ministry of Energy and Mines announced that between January and May 2022, metallic and non-metallic mining exports totalled $16.3 billion, a 6.8% increase over the same period in 2021.
According to the Mining Statistics Bulletin, the mining subsector was responsible for 59.8% of total exports thru May 2022.
Copper, gold, zinc, and iron ore topped the list of export products, accounting for 88.9% of the total value of mining exports.
Copper exports, in particular, reached $8.2 billion as of May, thus showing a 5.7% increase when compared to the same period in 2021.
The red metal is Peru’s main export product accounting for 30% of total shipments.