Although mining activity in Peru is affected by a complicated political risk outlook that includes obstacles such as political instability, violent protests, organized crime activity and illegal mining, the sector continues to contribute 10% of the country’s GDP and 60% of exports. In September 2023, an anti-mining activist named Miguel Meza organized a protest in the city of Arequipa to call on Peru’s government to cancel the nearby $1.4 billion Tía María greenfield copper mine, which is owned by Southern Copper. Peru’s government is currently working to facilitate new projects worth over $50 billion, but the future of Peru’s mining sector continues to be affected by the risk of protests from local residents in mining communities. “They know they will find conflict here,” Meza said.
A number of major mining projects in Peru have been affected by protests in 2023. Glencore’s Antapaccay mine was temporarily closed after being targeted by protesters in January. In February, protesters disrupted transport of supplies and forced the temporary suspension of work at the Las Bambas mine which is run by China’s MMG. The government has been forced to send in the military to restore order and unblock roads in many key mining areas. Executives at foreign companies doing due diligence on potential mining projects in Peru need to understand the full range of political risks that affect the sector. A Peruvian mining consultant who previously served as Peru’s Deputy Mining Minister believes the word that describes the dynamics in the current Peruvian mining sector is “opportunity.” As the country moves into the 21st century, modern mining, including the exploitation of copper, gold, silver, zinc, lead, and other minerals, continues to be a key element of Peru’s economy, generating around 9% of national GDP, 14% of fiscal revenues, 59% of total exports, 11% of all private investments, and between six to eight jobs derived from each post in the sector.
For more information Contact Us