Peru boasts significant mining potential thanks to an abundance of geological resources and a competitive ecosystem that facilitates business. Furthermore, the sector is a key contributor to the broader economy. According to BBVA Research, in 2017 the mining industry accounted for 60% of total exports, 11% of private investment, 10% of GDP, 5% of tax revenues and 5% of the workforce, which equates to approximately 190,000 direct jobs, not including illegal mining operations. According to the research firm, each direct post in the mining sector creates four indirect jobs, while the National Society of Mining, Petroleum and Energy (Sociedad Nacional de Minería Petróleo y Energía, SNMPE) estimates six indirect jobs per direct post.

Taking into account new projects in the pipeline, BBVA Research forecast mining investment will account for approximately 0.7% of GDP in 2019, up from 0.4% in 2018, while tax revenues should also increase over the years due to higher profits from projects currently in construction.


The incumbent administration has demonstrated its support for the development of the industry and encourages investment in the sector through an attractive legal environment.

President Martín Vizcarra Cornejo himself is openly pro-mining, and certain regional administrations that were previously hostile to mining activities are now led by more industry-friendly politicians. For example, in October 2018 pro-investment candidate Mesías Guevara Amasifuén beat anti-mining opponents to become governor of the Cajamarca region, which holds 38% of the country’s gold reserves and 22% of its silver. Therefore, the political components exist for the Ministry of Energy and Mines (Ministerio de Energía y Minas, MINEM) to take full advantage of its portfolio of 48 prospective projects, which will require approximately $60bn of investment.

Road Blocks

However, mining investment has come in sporadically over recent years, and although the outlook for the sector in 2019 is largely positive, the industry needs to become more proactive if the recent growth trends are to continue. One issue weighing on investment is social conflicts, which are delaying several potential projects, or have shelved proposed works altogether. For example, the Conga project in northern Peru was suspended indefinitely due to years-long protests citing its environmental impact on the local community. Meanwhile, the Tía María project has been stalled several times due to local opposition. In March 2019 international media reported that the government plans to finally grant Southern Cooper, a US-based mining firm, a licence to start construction.

Some existing mines have also been affected. Between February and April 2019 a local community blocked the access road to the largest copper mine in Peru, Las Bambas, which is owned by China’s MMG. According to international press in May 2019, a new road blockade was imposed by the Fuerabamba community after their demands were rejected by the mining company the previous month.

Such conflicts are not helping sentiment in the sector, and there are trends that suggest Peruvian mining could face growth challenges in the long term. Not only is investment in exploration down, but this investment is mainly in brownfield projects, which seek to expand existing sites rather than discover new ones. MINEM data shows that after averaging $864m per year between 2010 and 2015, investment in exploration totalled $377m in 2016, $484m in 2017 and $413m in 2018. In the first three months of 2019 it stood at $68m, down by 31% year-on-year.

“If Peru wants to stay in the game for the next 10 years, it must refocus and become attractive for exploration,” Luis Rivera, president of the Peruvian Institute of Mining Engineers (Instituto de Ingenieros de Minas del Perú, IIMP), told local press in December 2018.

One Vision

According to MINEM, exploration of mineral resources and the construction of new projects are the only way for the mining sector to increase its contribution to Peru’s economic development.

The need for a vision to boost the attractiveness of the Peruvian mining sector is shared by many in the private sector. “Without a long-term vision or plan, our days fill up with conflicts and immediate problems,” Miguel Cardozo, president and CEO of local firm Alturas Minerals, told OBG. “No one thinks about the positive developments that are happening, only the problems; short-term agendas end up being just about putting out fires, so it is necessary to go beyond that.”

With this in mind, MINEM gathered 33 representatives from mining companies, NGOs, academia and government to help draw up a vision for Peruvian mining through to the year 2030. Unveiled in February 2019, the document envisages a sector that is “inclusive, socially, environmentally and territorially integrated, and under a framework of good governance and sustainable development”.

“This is something that has never been done before in the country,” Walter Sánchez, director of mining promotion at MINEM, told OBG. “The crucial thing is that the ice has been broken.”

Supporting Communities

Certain initiatives aimed at the sector, including social funds provided by mining companies and the government’s Social Advancement Fund, are designed to fund public works projects in the areas that need it the most, thus ensuring that communities are not left behind.

There is recent evidence of the private sector and the government joining forces to accelerate the development of mining projects while at the same time providing opportunities for local communities. Despite the social protests surrounding the mine, Southern Cooper’s $1.4bn Tía María project looks set to receive the green light. In April 2019 the company reported that it was deploying a programme to train 700 local residents. The mining project is expected to create 3600 direct jobs and 5400 indirect positions during the construction phase, and once in operation, it will employ 600 labourers directly and 4200 indirectly.

Raising Awareness

Another key objective that forms part of the inclusive vision for mining is ensuring that the broader population is aware of the benefits that Peru receives from a thriving sector. Industry bodies are focusing heavily on this theme. The IIMP created the Promoción Minera, or Mining Promotion, initiative, which seeks to underscore the importance of mining development by holding workshops targeting students, professionals, government authorities and community leaders, among other groups.

The SNMPE has also undertaken its own awareness campaign to extol the benefits that the mining industry brings to the country. In September 2018 it launched the Minería de Todos, or Mining for All, scheme, which aims to create a permanent space for dialogue about the industry. “We are trying to provide answers to people who do not receive the information they should about mining,” José Eduardo Roca Serkovic, institutional manager of the mining sector at the SNMPE, told OBG. “This is a long-term process as we try to bring the mining profession closer to the people. More than year-on-year trends, what we care about is sustainability and continuity in the sector.”

In September 2018 MINEM approved the creation of mining and energy information and management committees, which seek to reduce the asymmetry of information between communities, the state and private enterprises. The committees will coordinate with local governments to identify progress in development and social welfare projects relating to mines, as well as promote transparency mechanisms and access to information regarding mining and energy issues. They will also ensure that the state and private companies are holding up their agreements and meeting their legal obligations. According to a press release in May 2019, four committees were set up in 2018 and a further five are expected to join in 2019.

Together, the government and the private sector are seeking to reduce procedures and simplify processes, improve the rules that regulate mining and promote a more favourable social environment for investment.