Peru's mining sector woes

On Sunday, Peruvian business journal El Comercio ran a feature peace detailing the woes afflicting the country’s mining industry. The report explains that profits and revenue plummeted in 2014 because of depressed metal prices. The fear is that these prices are not “depressed” but are actually signs of a new normal, where prices and profits will be much lower than they had been.

Some observers, however, warn that the problem facing Peru’s mining industry isn’t just one of a new reality regarding mineral prices, but also a question of competitiveness. The lack of clarity in Peru regarding licensing procedures, social conflicts, and a clear path for the industry in the future have created a lot of uncertainty in the sector.

In addition to these global, macro-economic factors, the Peruvian mining sector has also been battling the question of how to deal with the country’s large population of informal miners. On Saturday, El Comercio reported that Juan Antonio Fernández Jeri, the Peruvian High Commissioner for Miners’ Formalization, had told reporters that, since the end of last year, more than 400 informal miners in Puno had begun the formalization process. Fernández called on other regions in Peru to follow Puno’s example.

In related news, police in the Cusco area disabled heavy machinery that was going to be used for illegal mining. The equipment had no documentation showing that it was intended for a licit purpose, and the Peruvian authorities ultimately decided to put them out of service.