What the Future Holds for Peru’s Mining Industry and Its Companies

Regardless of what you mine, there is an inevitable volatility to the business structure. Mines require government and local contacts and cooperation, skilled miners, heavy machinery, transportation to the coast—and the transportation to the refinery or destination country. With 10 metals and minerals to mine throughout the South American country of Peru, mining has become big business.

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The 10 Metal And Minerals Mined In Peru

Peru has a diverse and in-demand mining capacity. Their production of their 10 metals and minerals remains at 1 or 2 in all of Latin America. Globally, they are almost always in spots 2 through 6. Their 10 metals and minerals include:

  • Silver
  • Zinc
  • Tin
  • Lead
  • Gold
  • Copper
  • Molybdenum
  • Cadmium
  • Iron
  • Tungsten

 

Most Peru Mining Companies Are Foreign Owned

To rapidly increase the output of their mines, and exploration of new mining opportunities, Peru opened their mines up to foreign investment in the mid-2000s. Some major projects are mapped out over the next 3 to 5 years, bringing in over 100 billion in global foreign investments to expand mining efforts. While some metal markets ebb and flow, there will always be a demand for Peru’s 10 metals and minerals.

Investments are required for many aspects of mining, including:

  • Preparing mines and routes
  • Mining equipment
  • Exploration and Exploitation
  • Infrastructure
  • And the many costs associated with opening a foreign business

 

Peru Relies Heavily On Mining Profits

This west coast country and its residents rely heavily on the taxes, mining rental contracts, and the various profits created by mining. The revenue is used to stabilize the middle class, minimize poverty, and create new nationwide social welfare programs. Not to mention, the Peruvian miners and transport professionals who support their families with their mining-related employment. While mining was big business prior to opening the door to global investors, the scope and scale simply can’t be compared.

Mining Challenges Are Inevitable

One thing that Peru mining companies can’t accurately predict, but must take a proactive and swift real-time response to—are the inevitable challenges of mining. From compromised mines, labor strikes, transportation bottlenecks, and weather-related delays. Also, the cost and delay of getting mining machinery back up to speed. These challenges are costly, and inevitable. Just one day of delays can have long-term repercussions.

Just imagine the cost of the 2017, 2-week long delay to transportation routes caused by heavy rain. Or what about the recent strike in Cerro Verde left the copper mine struggling. While the Peruvian government intervened, and outlawed the strike for not following proper union channels, most miners did not return to work. This left untrained new hires and strike-breakers working 12 hour days in a job which requires great attention to detail. Why the strike? Miners wanted better family healthcare benefits, new systems for assessing work-related accidents, and a larger share of the profits.

A Major Increase In Exploration

While mining production is high, it is estimated that only about .30 percent of the Peru’s minerals mining territory has been explored. While this leaves an impressive area of opportunity, it’s simply not possible that unexplored areas will be available for mining. While Peru is certainly open to exploration and expansion, there is still a priority of keeping their country, communities, and agriculture intact. As in all countries with in-demand resources, this is a constant topic of debate and negotiation.

Peru mining companies certainly have a lot of reason to be excited about the future. Even with some mining markets fluctuation drastically, only the tip of the ice berg in Peru has been tapped.

American Chamber of Commerce of PeruOverseas Automotive Council Petroleum Equipment Institute
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