Peru is globally recognized for its outstanding mining industry, particularly in relation to copper. This metal holds great significance in various sectors such as electronics, construction, and renewable energy. In this article, we will delve into the mining potential of copper in Peru and explore the investment opportunities it offers.
Peru Bets on Copper: Projects a 15% Increase in Production for this Year
Peru, one of the leading copper producers worldwide, plans to increase its production of the red metal by 15% this year, reaching around 2.8 million tonnes, as reported by the Minister of Energy and Mines, Óscar Vera. This projection is due to the recovery of operations in significant mines that were affected by protests earlier this year.
During the past year, Peru produced 2.438 million tonnes of copper, representing a 4.8% increase compared to the previous year and nearing the pre-COVID-19 pandemic peak level.
The mining production in Peru was impacted at the end of last year due to road blockades caused by a series of protests following the removal of the left-wing president, Pedro Castillo, who attempted to illegally dissolve the Congress.
«In March, the situation has practically normalized, and we can say that by April, operations were already back to normal,» stated Vera during a press conference with foreign media. «We are very optimistic, and our goal is to produce 2.8 million tonnes this year,» he added.
Minister Vera affirmed that the government is working on reducing the approval timelines for mining projects as part of measures to boost the sector. Currently, the approval process takes around two years, but it is expected to be reduced to six months.
For the years 2023 and 2024, the execution of several mining projects is projected with a total investment of $7 billion, including the expansion of the Antamina copper mine.
Solid Mining Investment in Peru Despite Copper Price Decline
While a gradual recovery in the price of the red metal is expected over the next five years, it is progressing at a slower pace than initially estimated, due to the cooling down of China’s economic recovery. Although there has been a slight improvement in international markets in recent weeks, the price of copper would not reach the estimated values of $4.42 per pound forecasted for this year in April.
This situation has not generated a significant negative impact on mining investment in Peru. Despite the decrease in the copper price, investors continue to show confidence in the long-term potential of the Peruvian mining sector. The diversification of mining projects, as well as the implementation of risk mitigation strategies, have contributed to maintaining a solid foundation for investment in this field.
It is important to highlight that, although the price of copper may fluctuate in the short term, the long-term prospects remain favourable. Values close to $5 per pound are expected to be reached in the coming years, providing a positive framework for investment in the mining industry.
Copper Continues to Drive Peru’s Mining Sector
It is of vital importance to highlight the significant role played by the Mining and Hydrocarbons sector in the Peruvian economy, accounting for approximately 11.3% of the country’s total Gross Domestic Product (GDP).
During the month of April this year, this sector experienced a year-on-year growth of 17.4%, mainly driven by the increase in production of most minerals, except for gold, molybdenum, tin, and natural gas liquids, according to data collected by the Central Reserve Bank of Peru (BCR).
These results have contributed to the accumulated growth of the sector, reaching 6.1% during the first four months of the year, driven by the increase in copper, iron, and natural gas production.
This positive performance reinforces the strategic importance of the mining and hydrocarbons industry in Peru’s economic development. Copper production, in particular, has had a significant impact on this growth, given its prominent position as one of the country’s main export products.
The increase in copper production, as well as iron and natural gas, has allowed for job creation and attracted investments to the sector, which is crucial for economic diversification and the well-being of the population.
According to data provided by the Central Reserve Bank (BCR), an impressive growth of 31.4% in copper production was observed in April compared to the same period in 2022.
This significant increase in copper production demonstrates Peru’s strong position as one of the leading producers of this metal worldwide.
Movements in the Peruvian Copper Market
According to the agreement reached, Barrick Gold, a renowned mining company, has obtained an option to acquire a 70% stake in the copper and silver exploration project called Charaque, located in Peru. This strategic partnership has been finalized in collaboration with Valor Resources, a company based in Australia.
Under the terms of the agreement, Barrick Gold will have a five-year period to exercise its option to acquire the mentioned stake. This will allow Barrick Gold to consolidate its presence in the project and actively participate in its development and exploration.
As part of this transaction, Barrick Gold commits to making cash payments totaling $800,000 (equivalent to CAD 1.05 million) and allocating at least $3 million for exploration activities in the area, which covers a land area of 60 km².
Furthermore, Barrick Gold has the option to acquire an additional 10% stake in the project by exercising a second option, for which a cash payment of $1 million will be required.
This agreement not only strengthens Barrick Gold’s presence in the Peruvian mining sector but also reinforces Peru’s position as an attractive destination for mining investment, encouraging the growth and sustainable development of the sector.
Meanwhile, in Arequipa, the Zafranal mining project aims to carry out a significant investment of $1,263 million. This mining project represents a great opportunity for the economic development of the country and the region.
During the construction phase of the project, it is estimated that over five thousand jobs will be generated, both directly and indirectly. This investment in employment will contribute significantly to the economic and social growth of the area.
Additionally, the construction of the Zafranal mining project is projected to have a positive impact on the Gross Domestic Product (GDP) of Arequipa. Under a favorable scenario, a 4.8% growth in the region’s GDP is expected during the construction period.
Julio Velarde, President of the Central Reserve Bank, has reported that the Zafranal mining project is in an advanced stage and is expected to commence operations in September of this year.
Strategically Invest in Peru’s Copper Mining Sector and Achieve Solid Returns
At F2F CUSCO, we specialize in mining property transactions and are delighted to assist you throughout the process of purchasing and launching your business. On this occasion, we offer you a copper mining property for sale with the following characteristics:
LOCATION: CUSCO SIZE: 200 HECTARES
WORKS CARRIED OUT:
Hydrothermal alteration studies have been conducted for iron (Fe) and copper (Cu) oxides on a 1:50,000 scale.
Geological information from studies on a 1:50,000 scale has been collected.
Petromineralogical and petrographic information has been compiled.
Geochemical and geophysical information has been gathered.
Information from the diamond drilling program has been collected.
GEOLOGY: The project has undergone geological, geochemical, and geophysical studies.
MINING: The project has inferred resources.
COMMENTS: We highlight the excellent community relations and availability to work in the area.
This mining property is characterized as a proven copper and cobalt porphyry suitable for open-pit operations in the medium to large-scale mining industry.
At F2F CUSCO, we are ready to provide you with all the necessary information and guide you through the process of acquiring this mining property in Cusco. Contact us for more details and take advantage of this investment opportunity in the copper mining sector.
You can also read:
Mining Permit Requirements in Peru: Everything You Need to Know
Buying Property in Peru: A Guide for Foreign Investors
Enrique L. Gonzalez
+51 951 066 165
CEO F2F CUSCO
