Investment in exploration in the Peruvian mining industry
has cratered
over the last few years. After peaking at $1.035 billion in 2012, investment
fell by 49% over the subsequent two years and is expected to fall by another
10% this year. Miguel Cardozo, president of mining company Alturas Metals,
believes that this year’s fall will be the last of it, as at that point the
mining industry will have bottomed out.
El Comercio’s article explains that despite this collapse in
investment, Peru is still the seventh-most attractive country in the world for
mining investment. The rapid decline in exploration spending is a global
industry-wide phenomenon that is not just exclusive to Peru. Nonetheless, Peru
has an extra factor that many other countries do not: social conflicts scare
mining companies, especially small mining companies, away from exploration
investments.
Salomón Lerner Ghitis, expresident of the Peruvian Council
of Ministers under Ollanta Humala, warned
that Peru cannot remain as just a mining economy and must diversify its
productive base. He explained, “Peru is a mining country, we recognize this and
continue fighting for there to be mining with technology that respects the
environment. There needs to be a march towards a diversification among
high-potential productive sectors in the country. This has been (Ollanta
Humala’s) rhetoric, but he has not applied it.”
In other mining-related news, Peruvian Environment Minister
Manuel Pulgar-Vidal told
reporters that the government will explain to people its environmental
assessment of the Tía María mining project in order to assuage doubts and
concerns. The next day, Minister Pulgar-Vidal announced
that President Humala himself would travel to the region in order to clear up
the doubts regarding Tía María. Resolving this social conflicts gains
additional urgency with each passing day, as protests have paralyzed the area
for 17 days and counting.
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