The future of Peru's mining industry

In 2015, the two main stories for Peru’s mining industry were the country’s battle against illegal mining, and the formalized mining industry’s frequent clashes with local communities. Late last week, the Peruvian Ministry of Economy and Finance doubled down on the country’s push to formalize its mining industry.

The MEF announced that it would send S/. 1.8 million to six Peruvian regions to fund formalization in those regions’ mining sectors. This decision shows that the Peruvian government recognizes that the decentralization of the country’s mining sector undermined the federal government’s efforts to formalize Peru’s mining industry. Several Peruvian regional, most famously Madre de Dios, sided with their informal miners against the central Peruvian government. With the additional funds, though, the regional governments will likely change their tune.

According to the Andina news agency, the Peruvian government carried out 100 operations against illegal mining throughout the country in 2015. Just last week, the Peruvian government revealed that 120 illegal mining encampments were destroyed in a raid called “La Cumbrera 2015” in the Cusco department. This time, the illegal miners fought back and detonated dynamite in an attempt to prevent the operation.

 The raids this year brought together officials from various Peruvian agencies and departments, and were carried out at a steady rhythm throughout the year. The Andina report made no mentions of plans for 2016.

Nonetheless, the Peruvian mining industry has remained very attractive to foreign investment. The total value of the country’s 47 ongoing mining projects now comes to $56.4 billion. Of that money invested in Peru’s mining industry, Chinese companies have invested more than one-third of it.