Oil production falls while copper production climbs in Peru

The Peruvian National Society for Mining, Petroleum, and Energy announced that the country’s production of liquid hydrocarbon averaged just 135,000 bpd in September of 2015, a 21% fall in production compared to the same month in 2014. Production fell for both oil and liquid natural gas. Nonetheless, these figures represent a slight increase over production in August of 2015.

In related news, the Peruvian Ministry of Energy and Mines announced the copper production figures for September 2015. Copper production shot up 41% over the same month in 2014, mostly due to the increased copper production by the country’s leading copper producer, the Antamina Mining Company.

Peruvian business journal La Republica reported on a study done by Peru Top Publications that concluded that only half of Peru’s mining project pipeline could feasibly be implemented. The inability to develop these projects could result in the loss of $32 billion in mining investment. The majority of these uncertain projects are still in the exploration phase, and PTP recommended that the country implement new strategies to stimulate the mining industry.

This study shows just how fragile the economic success of the Peruvian mining industry really is. The Peruvian government likes to cite these gaudy numbers about the billions of dollars that the industry brings to the country’s economy, but the government needs to be careful that the ongoing problems of social conflicts between large mining companies and local communities do not cause these investments to disappear.