(12-03-2024) Investment in mining exploration during 2024 would exceed US$600 million, as indicated by the Minister of Economy and Finance, José Arista, during his presentation at the CEO Luncheon on March 4th, within the framework of the annual convention of the Prospectors and Developers Association of Canada (PDAC), the main event for mining investors and exploration industry worldwide, which took place in Toronto, between March 3rd and 6th.
The CEO Luncheon is one of the central activities on the agenda of the Peruvian delegation participating in the event, organized by the Canada Peru Chamber of Commerce.
The amount mentioned by Minister Arista would represent an increase of almost 40% compared to the previous year when exploration investment closed at US$433 million, marking a growing trend, which demonstrates investors’ confidence in the country, he emphasized.
This investment is part of the mining project portfolio for 2024, consisting of over 60 projects at various stages of development, requiring a total capital of approximately US$54 billion.
In order to achieve the execution of these investments, the high-ranking official specified that the Ministry of Economy and Finance (MEF), in coordination with the Ministry of Energy and Mines (MINEM), the Ministry of Environment (MINAM), and the Ministry of Agriculture (MINAGRI), “we have assembled a team to work on solving all the obstacles and delays that investors may encounter in obtaining the appropriate permits for the execution of their projects.”
Thus, steps are being taken at the highest level of government to address one of the main hurdles investors face in Peru, namely, the so-called “permit bureaucracy” and the time it takes to comply with over 200 regulations.
Minister Arista emphasized that it’s not just about anticipating possible delays, but also that “this team is also gathering all the information about redundant regulations, to either eliminate or improve them and reduce the approval timelines. In this way, we aim to minimize the bottlenecks that may be encountered in this activity.”
The emphasis on reducing “permit bureaucracy” is crucial in a sector like mining, which in Peru represents around 12% of the GDP; it is the leading export sector and generates foreign exchange, as well as a significant amount of employment, with approximately 10 indirect workers linked to the sector for every direct worker, highlighted the high-ranking official.
Therefore, as Minister of Economy, and with Ing. Rómulo Mucho as Minister of Energy and Mines, “our main activity will be to promote the sector and address all the concerns of those who take the risk to invest in mining,” he pointed out.
In line with this, the Energy and Mines sector continues to work on improving the regulatory framework to promote investments in exploration, a stage of the mining process that, in other “parts of the world, is not as regulated as in Peru”, considering it a simpler process.
The Minister also dedicated a significant portion of his presentation to showcase the solid fundamentals of the Peruvian economy, characterized by its macroeconomic stability, adherence to free-market principles, and openness to the world, with key variables under control such as inflation, fiscal deficit, and public debt.
“The Peruvian economy is one of the most robust in Latin America,” he said, highlighting the attractiveness of investing in mining in Peru due to its low costs, from energy to labor.
He also mentioned pending shortcomings to resolve, such as the lack of development of road infrastructure to facilitate the transportation of minerals from extraction areas to the coast. He cited Apurímac and Cajamarca as examples, from where new copper production could be developed, potentially doubling our current production to approach 5,000 tons annually.
“A train connecting us from Apurímac to the coast could cost us approximately US$9,000 to US$10,000 million. But compared to the possibility of exploiting this land for approximately 100 years, it’s truly a negligible cost”, he remarked.