Peru's mining sector in 2022: From optimism to gloom

Bnamericas Published: Friday, December 23, 2022
Peru's mining sector in 2022: From optimism to gloom

What looked like it was going to be a good year for the Peruvian mining sector – high commodity prices, economic recovery, and strong demand for copper – will end up being one of zero growth and an uncertain outlook for the coming years. 

Social conflicts in various regions put the progress of important projects and mines on hold, with major investment decisions such as on the Yanacocha sulfides gold project postponed.

In addition to blockades of highways and projects in the construction phase – common occurrences in Peru – this year large copper operations such as Las Bambas and Cuajone were interrupted for nearly two months, which affected potential growth of the country. From an initial projection of 5.9% for mining sector growth in 2022, the central bank adjusted downward its forecasts during the course of the year – 2.9% in Q2 and 1.6% in Q3 – until reaching a final projection of 0% for the year, according to the latest inflation report from the monetary authority.


Likewise, there were blockades at mines such as Nexa Resources’ Atacocha, Glencore’s Antapaccay and Hochschild’s Inmaculada. Just in the case of Las Bambas, the stoppages generated losses of more than US$500mn in exports and 286mn soles (about US$75mn) in mining royalties. Eventually, like Cuajone, the mine resumed operations after reaching certain agreements, and is currently operating.

However, the problems that were not fully resolved are already knocking on the door. The future of Las Bambas’ new Chalcobamba pit remains undecided, the communities in the area of influence continue to demand things that are not feasible, and now the mine’s storage capacity is at risk due to the recent blockades and protests unleashed as a result of the removal of Pedro Castillo as president.


What happened, and is still happening with Las Bambas, is a clear reflection of Peruvian mining during 2022: companies trying to meet their objectives, social conflicts that put development on hold and temporary solutions to calm the situation, resume business and make up for lost time.

Each mine can act within its area of influence, but there is no state or competent entity that monitors the agreements and acts as a mediator. During 2022 it was observed that, while one mine was resolving a dispute, a new problem arose in another operation for similar reasons: property titles, renegotiation of contracts, direct interaction between the communities and mines but without the State involved in dealing with demands such as payouts.

Social discontent has been much greater than in previous years. This is explained, in part, by the impractical promises that Castillo made during his election campaign and the first days of his government, such as nationalizing mining and the hydrocarbons sector. That obviously did not happen, which has left the population uneasy due to false expectations and, in some cases, there are calls to fulfill the promises at all costs.

This scenario generated concern in the private sector, but it was the constant changes of opinion, indecisive positions, lack of seriousness and continuity of public officials which ended up weakening the perception of investors. The focus of the following years will be on the development of projects under construction as the cost of halting them is very high, but the long-term challenge continues to be to promote mineral exploration.


After forecasting at the beginning of the year that mining investment will fall 0.8% in 2022, the expectation at the end of the year is a drop of 6%, according to the central bank. While Quellaveco, the long-awaited Anglo American copper project, was launched in September, the injection of capital in the sector will not be enough for Peruvian mining to get out of negative territory.

Although a rebound in mining production is expected, that assumes the normalization of operations that suffered blockades and interruptions during 2022. Nothing guarantees that. The follow-up and monitoring of social disputes will be important so that agreements are respected and sensible solutions are reached and growth prospects do not have to be revised downwards.

Subscribe to the most trusted business intelligence platform in Latin America. Let us show you our solutions for Suppliers, Contractors, Operators, Government, Legal, Financial and Insurance.

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

Other projects

Get key information on thousands of projects in Latin America, from current stage, to capex, related companies, key contacts and more.

Other companies

Get key information on thousands of companies in Latin America, from projects, to contacts, shareholders, related news and more.