Peru, the world’s second-largest copper producer, is beginning to lose its competitiveness for mining investment, with average spending falling from $517 million in 2017 to about $500 million in 2023, despite global investment rising from $7.95 billion to $12.8 billion.
Altura Minerals CEO Miguel Cardoso said during a webinar hosted by the National Society of Mining, Petroleum and Energy (SNMPE) that the decline was mainly due to a glut of permitting procedures that began with Supreme Decree No. 042 of 2017.
Cardoso said investment was being directed towards neighbouring countries such as Chile, the world’s top copper producer.
“Exploration investments in Chile are estimated to increase by $100 million in 2023 compared to 2022, and in Argentina by about $40 million, while Peru has declined by $40 million, from $541 million to $501 million, in a year of production recovery. This gives an indication of where we are in reality,” Cardoso said.
Industry experts believe the government’s digital one-stop shop is a good start to speed up the permitting process, but more work needs to be done.
“It is not enough to organize public institutions to operate digitally. From one institution in charge of mining permits, [the energy and mines ministry] “The mining sector has grown to 25 sectors and regulations from 20 to more than 250. This cannot be solved by restructuring the bureaucracy, and political instability does not allow the restructuring of any of the agencies related to mining issues,” Cardozo added.
Peru aims to produce more than 3 million tonnes of copper in 2024. Cardoso said that target is achievable as previously halted operations normalize and Quellaveco returns to full production, but the potential is much greater.
“The government’s projection is that we will have the capacity to produce more than 5 million tonnes of pure copper by 2030. But that’s not going to happen. We need more order, time and cooperation to get there,” he added.
Once the issues are resolved, Peru could see exploration investment of at least $1 billion a year, Cardoso said.
“Many exploration projects can be resumed and we can comfortably bring twice as many initiatives into the portfolio as we have now (75, according to the Ministry of Energy and Mines). In 2012 there were about 140 exploration projects,” he added.
