Tuesday, February 12, 2013

Boom in mining investment in Peru

There are 52 ongoing mining projects in Peru with 53 billion dollars of investment in the coming ten years.

In 2012, the government gave 4668 mining permits to 582 companies up from 3100 in 2011.

Peru expects to increase its copper production from the current level of 1.3 million tons to 5 m tons by 2025. Peru is currently the third largest coppoer producer. Chile, the number one, produces 5.7 m tons
Mining accounts for 15% of the GDP of Peru.

The big investments include
- Chinalco ( Chinese) - 2.2 bn $ copper mine
-Newmont - 5 bn in gold and copper
-Anglo American - 3 bn
-Xtrata - 6 bn

One of the major challenges for mining is the protests from local communities displaced and affected by the mining operations. There have been more than 200 conflicts some of which turned violent resulting in the death of some protestors. Chinalco is spending 150-200 m $ for resettlement of the affected families but the community leaders demand 300 m. Other companies are also making provision for " social funding" to avoid the social tensions. Fortunately, Ollanta Humala, the leftist president of the country, is able to manage the conflict between the miners and the local communities with his leftist credentials.

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