"Peru has more political stability than a year ago, an attractive legal framework for investments, and abundant local talent and capital."

Rómulo Mucho


March 22, 2024

Could you provide an overview of the current state of the mining industry?

The pandemic was a tragedy for the country, and there were few advances in mining projects. While 2021 marked a year of recovery, the progress in 2022 did not match the same intensity witnessed in 2021. In 2023, mining maintained positive results. Despite Peru’s overall economic growth dipping to -0.55%, mining contributed approximately 1.5% growth, mitigating what could have been a more severe downturn. It is crucial to convey this message to the public as we continue to grapple with a global challenge in shaping a positive perception of mining. 

We anticipate 3% growth in 2024, and mining will play a key role. To achieve this growth, mining must take decisive steps forward, securing the necessary permits and garnering support from the Agriculture, Culture, and Environment Ministries. The current government recognizes the importance of mining, which I believe is the reason for my appointment. I am very pleased to have a competent team, including the Director General of Mining, the Vice Minister, and the promotion and sustainability team. 

With approximately 70 exploration projects in progress, Peru must intensify exploration and efforts to attract investors and meet the growing demand for metals. We aim to exceed US$500 million in exploration investments, building upon last year’s closing figure of US$481 million. Peru has more political stability than a year ago, an attractive legal framework for investments, and abundant local talent and capital.

How are mining projects in Peru’s pipeline progressing?

The Zafranal project, scheduled for 2026, could move forward if there is a favorable disposition and surface land issues are resolved. Meanwhile, San Gabriel is actively undergoing construction. Corani has all the necessary elements in place and is awaiting the resumption of financing. Conversely, the Magistral project is currently not on Nexa Group’s immediate agenda, mainly due to its complex logistics, including access challenges. Romina, a medium-sized project, is progressing. Regarding Newmont’s Yanacocha Sulfuros project, although it was ready for development, it was indefinitely postponed during Castillo’s government. 

What is the status of the projects stalled due to social issues? 

We expect the start of operations at Las Bambas' second pit, Chalcobamba, this 2024,which would represent a significant increase in Las Bambas' production. The integration of Coroccohuayco at Antapaccay also holds promise for a significant increase in copper production. 

Do you think the forced closure of First Quantum's mine in Panama has increased the perceived risk of investing in Latin America?

Yes, investors often group all of Latin America into a single category. In Panama, the focus on ESG and communication was insufficient to avoid the population's opposition to the project. First Quantum had been present in Panama for over 20 years and developed a project that represented one of the most significant investments in the world, amounting to US$11.3 billion. Apart from the mine, the investment included a port, a 300-megawatt coal-fired power plant, a railway, and a copper production plant with capacity to produce 400,000 tons of copper annually. The effects of the forced closure of the mine had consequences globally, as much of the copper that was to be produced already had customers.

Following the events in Panama, First Quantum has decided to focus on Peru, not only on La Granja, one of the largest undeveloped copper deposits in the world, but also on the next project, Haquira. The Panama incident should serve as a warning to Peru, as it demonstrates that if we do not handle our laws and regulations properly and manage modern mining projects adequately, we could face similar situations.

Do you have a final message?

Peru remains an attractive country for investments. The state must respect established rules and promote research to add more value to the industry. The general perception that we only sell raw materials must change, so we must gradually modernize our conditions and refineries. The population needs to see mining as a solution, not a problem. 

The government is making a great effort to streamline processes through the Ministry of Energy and Mines. Currently, we are working with 10 public institutions to implement a transactional one-stop shop that facilitates procedures. In addition, recent regulations, such as sworn affidavits, have been introduced, simplifying some processes and providing legal certainty to investors.


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