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Mining could fuel Peru's economic revival

Bnamericas Published: Thursday, June 25, 2020
Mining could fuel Peru's economic revival

Peru's mining sector is convinced that it can kick-start the national economy, which is in freefall from the COVID-19 crisis.

Demand for Peruvian mining products and the recovery in prices that has begun to be seen in recent weeks mean the time is right to increase production and incentivize the mining sector, reducing deadlines to obtain licenses and permits. If not, projects that do not produce tangible results in the short term could be postponed, Victor Gobitz, president of Peru's institute of mining engineers, told BNamericas.

"If we were able to generate incentives in terms of time, with the concept of administrative silence [requests not dealt with in sufficient time are considered approved], and if we can establish industry growth of around 10%, we would be talking about levels equivalent to the development of another [US$5.3bn copper project] Quellaveco," he added.

Restrictions established in Peru to slow the advance of COVID-19 meant that mining companies maintained only critical operations for more than two months, so they will face around US$5bn in production losses. However, energy consumption in the sector reached 90% of normal levels on June 16, indicating that large-scale mining was in recovery and should reach usual production levels in July, according to Gobitz, who is also CEO of local precious metals producer Buenaventura.

Gobitz believes that it will be necessary to wait until 2021 before there is a full recovery of the entire mining sector, including small- and medium-scale mining, as well as artisanal activities. 

To access the full interview, divided into two parts, click here and here.

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