- Peruvian mining investment expected to fall by 18% this year
- Miners promote use of contractors
- Government aims to streamline environmental permits
LIMA, Sept 27 (Reuters) – Peru is trying to put an end to the “disruption” of months of protests earlier this year and revitalize flagging investment in the world’s No. 1 mining industry. The country is the second-largest copper producer, but government leaders want more stability to boost spending.
As a mining conference begins this week in the Arequipa region of the southern Andes, Prime Minister Alberto Otalola cited concerns over political unrest and protests, which are expected to cause mining investment to fall by 18% this year.
“We will not allow the country to descend into chaos, anarchy and insecurity,” Otalola told the hundreds of mining industry leaders gathered, adding that the government was also working to streamline environmental permitting regulations. He added that there is.
In interviews with Reuters, executives said that although the situation had improved since mass protests across the country at the start of the year, governance remained weak and concerns were raised on issues such as the use of contractors and securing environmental permits. He said clear rules and bureaucracy remained an obstacle to new investment. .
Copper production has rebounded this year, but a decline in investment in the Andean country, which has seen six presidents in the past five years, puts production and the overall economy at risk. Mining accounts for 60% of Peru’s total exports.
“We’re concerned because it’s not very clear where the new government will go,” said Raul Yacob, vice president of finance at Grupo Mexico (GMEXICOB.MX) Southern Copper (SCCO.N), Peru’s third-largest copper producer. “There is,” he said.
He cited uncertainty over a law that limits the use of contractors by mining companies as part of cost-cutting efforts, and said the government should repeal the law.
Peruvian President Dina Bolarte took office late last year after former leader Pedro Castillo was impeached for trying to illegally shut down Congress. That sparked months of deadly protests. Bolarte himself has weak public support.
At the mining conference, Energy and Mines Minister Oscar Vera claimed that the government had “unlocked” nine projects this year, all of which were expansions or medium-sized operations.
The last major investment in Peru was Anglo American’s (AAL.L) $5 billion Querabeco project, which came online last year and helped cushion production.
Victor Govitz, president of Antamina, Peru’s largest copper mine, run by Glencore (GLEN.L), BHP (BHP.AX), Teck (TECKb.TO) and Mitsubishi Corporation (8058.T), believes that the constant political crisis is He said the impact was mainly on investment in copper mines. “Greenfield” copper site.
“Political risks and a clear mining policy are important for new mines,” Govitz, who is also head of the main chamber of mines, told Reuters by phone, citing risks related to long waiting times for mining rights and local community protests. The lack of that is the key.”
Mr Govitz said the government needed more “agility” to approve expansion projects, and to avoid conflicts that are often sparked by anger over mineral resources bypassing local communities. He said more emphasis should be placed on it.
“Peru is growing and that’s good, but at the institutional level it’s not growing as fast as the level of political maturity,” he said. “Our political system is divided, and that is having a negative impact on the entire country.”
Report by Marco Aquino.Editing: Adam Jordan, Sonali Paul
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