Peru mining investment on track to plunge in 2023

Bnamericas Published: Friday, November 04, 2022
Peru mining investment on track to plunge in 2023

Mining investment in Peru may fall by more than the latest central bank projection of 16.2% in 2023.

The market consensus estimates that mining investment will drop by between 15% and 18% next year, but Víctor Fuentes, head of economic thinktank IPE, told BNamericas the decline will be close to 18% or even more.  

Based on the central bank’s latest figures and its projection of a 3.7% drop this year, that would mean investment of around US$4.23bn in 2023. 

The lack of agreements between miners, the State and communities and new blockades of mines that were operating normally have hit the sector, leading to the postponement of investment decisions. 

The Las Bambas and Cuajone copper mines –of MMG and Southern Copper, respectively – paralyzed operations for more than 50 days in the first half of this year. Construction of Buenaventura's San Gabriel gold project, meanwhile, was interrupted in June and only resumed this month, while Newmont indicated that it will postpone the Yanacocha sulfides gold project, initially estimated for 2023, until the second half of 2024.

Although Las Bambas increased its estimate for copper production in 2022 to 250,000t from 240,000t, MMG executives have indicated that the Chalcobamba deposit will not contribute to production this year and its development will depend on dialogue with local communities, a process that the company expects to conclude by year-end.

The process, however, is expected to be difficult. The Huancuire community, with whom dialogue is being established, insists on being a shareholder in the company. Peru’s energy and mining association recently announced that the company will be forced to stop production again due to new blockades in Cusco region, which are preventing "the free movement of workers, the entry of supplies and food, as well as the transportation of the production from the mining operation.”

On the other hand, a community in Ayacucho region blocked access to Hochschild's Inmaculada precious metals mine and entered the premises illegally. 

In mid-September, economy ministry officials met with executives from Anglo American, Las Bambas and Hochschild to discuss the development of their mining projects with the blockades and threats that have hit business confidence.

The contagion effect was evident in the second half of the year – there were also blockades at the Atacocha (polymetallic, Nexa Resources) and Antapaccay (copper, Glencore) mines. Furthermore, anti-mining district and provincial mayors  are set to take office next year.

Also, a decision on water rights granted to Anglo’s Quellaveco copper mine is still not known. If access to water is denied to the recently started-up mine, which had all the permits and studies, the sector’s contribution to Peru’s GDP could fall, and create more uncertainty regarding large-scale projects.

Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.

Subscribe to Latin America’s most trusted business intelligence platform.

Other projects in: Mining & Metals (Peru)

Get critical information about thousands of Mining & Metals projects in Latin America: what stages they're in, capex, related companies, contacts and more.

  • Project: Los Calatos
  • Current stage: Blurred
  • Updated: 1 month ago
  • Project: AntaKori
  • Current stage: Blurred
  • Updated: 1 month ago
  • Project: Soledad
  • Current stage: Blurred
  • Updated: 1 month ago
  • Project: Shalipayco
  • Current stage: Blurred
  • Updated: 1 month ago
  • Project: Pukaqaqa
  • Current stage: Blurred
  • Updated: 1 month ago

Other companies in: Mining & Metals (Peru)

Get critical information about thousands of Mining & Metals companies in Latin America: their projects, contacts, shareholders, related news and more.

  • Company: CUMBRA Ingeniería y Construcción
  • CUMBRA Engineering and Construction, formerly known as GyM Engineering and Construction, is a regional construction company with 87 years of experience in Latin America, executi...
  • Company: Minera Las Bambas S.A.C.  (Minera Las Bambas)
  • Minera Las Bambas S.A.C., a consortium made up of MMG Ltd. – the Hong Kong listed unit of China Minmetals Corp. – Guoxin International Investment Corp. and Citic Metal Co. Ltd.,...
  • Company: Etermar Sucursal Perú  (Etermar Perú)
  • Etermar Peru is the local branch of the Portuguese maritime engineering and construction company Etermar. The company began operations in Peru in 2017. Etermar provides services...
  • Company: Inca Minerales S.A.C.  (Inca Minerales)
  • Inca Minerales S.A.C. is a Peruvian branch of the Australian mining company Inca Minerals Limited (100%), established in 2012 in Lima to acquire and explore mining tenements in ...