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The effects on the economy of recently completed mining projects by China Minmetals, Freeport-McMoRan, Chinalco, Hochschild Mining and Hudbay Minerals will fade after 2017, Prima CIO José Larrabure said. Investor confidence is also taking longer to recover following the economic slowdown over the past two years, he said.
While the energy and mines ministry (MEM) has lined up US$55bn in mining investment commitments over the next decade, only Buenaventura's US$340mn Tambomayo gold-silver mine and Southern Copper's US$1.2bn Toquepala copper mine expansion are expected to ramp up in 2017.
"There will be no new major mining projects coming online over the next five years," Larrabure, who manages a US$12.5bn fund, told BNamericas. "This will sap economic growth over the next few years. We're concerned about the impact this will have on the country."
Prima is hedging its bets on a recovery of retail and consumer spending in the second half of 2017 as the government accelerates work on US$25bn in delayed infrastructure projects, Larrabure said.
A law that grants Peruvians access to 25% of their pension pot to buy a home has sparked fewer withdrawals than originally feared, he said. Clients have applied to withdraw 600mn soles (US$175mn) from their funds to date, according to Prima.
A congressional panel that is reviewing the legislation governing Peru's private and state pension systems is expected to publish its recommendations by mid-2017, Larrabure said.