Tuesday, October 21, 2014

The Economics of the Peruvian Mining Industry

Renowned Peruvian journalist Mario Sifuentes Briceño believes that Peru will become a first-world country and that mining will be the key to this transformation. He argues that Peru has always been a nation of skilled miners, and that this is not something to be ashamed of, but rather taken of advantage of.

No one could accuse Peru of not taking advantage of its abundant resources – so goes the mining industry, so goes the Peruvian economy. The Central Reserve Bank of Peru recently revised downwards its estimates for the country’s GDP growth in 2014, from 4.4% to 3.1%, down from last year’s rate of 5.8%. The delay in starting operations at Las Bambas in southern Peru contributed to the revision. Developed by MMG, at unit of China Minmetals, the Las Bambas project requires approximately an additional $3 billion USD to become operational. MMG expects the project to become operational in the first quarter of 2016.


Barclays’ head of European asset allocation research, Guillermo Felices, predicted that the Peruvian economy will rebound. While decreased demand for Peru’s mining exports were to blame for the slowdown, the near-term expansion of the mining industry will more than compensate.

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