Protests in Peru Jeopardize $53 Billion Mining Investments

Protests in Peru put the country’s mining industry, set for more than $50 billion in investments, in danger. The South American country is the world’s second-largest copper producer but it risks losing out on billions of dollars of mining investment if the government fails to calm protests.

Social conflicts have risen in the country over the past year, with a spate of protests against mines, including one that has halted production at the huge Las Bambas copper deposit.

With global prices soaring on high demand, that now threatens a mining investment pipeline of some $53 billion and could stall future projects, which are expected to make up 12% of the world’s copper supply in years to come.

Mining executives and analysts met in Lima last week. The main issues of the meeting was falling investment in the country tied to social uprisings. A central bank report shows investment dropping around 1% this year and 15% in 2023.

The communities in the poor Andean regions feel bypassed by the huge mineral wealth. President Castillo won the election last year promising a redistribution of mining wealth.

Southern Copper’s Cuajone mine was paralyzed for almost two months earlier this year.

Las Bambas, owned by China’s MMG, suspended operations in April after an invasion of the mine by communities. The mine, which produces 2% of the world’s copper output, remains shut down.

Las Bambas had received government approval in March to expand the mine, a plan which is now under threat.

Las Bambas executives underlined during the meeting in Lima that the country has a big opportunity to benefit from high prices.

Peru’s last big mining investments were in Anglo American’s Quellaveco and Minsur’s Mina Justa of a combined $6.6 billion. If their operations start this year it will help Peru hit an annual output of 3 million tonnes of copper by 2025.

However, the future of other major projects like Southern Copper’s $6.7 billion Tia María, Michiquillay and Los Chancas, Buenaventura’s near billion dollar Trapiche and Rio Tinto’s $5 billion La Granja remain uncertain.

Still, not everything has been going bad. The world’s largest gold miner, Newmont Mining, said at the event that it considers venturing into copper in Peru, with a potential future return to the canceled Conga project.

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