© Reuters. Artisan miner Samuel Retamozo shows bags containing rocks with copper content next to an area where hundreds of artisan miners have found a rich seam of copper in the hills of Tapairihua in Peru’s Andes, October 18, 2022. REUTERS/Marcelo Rochabrun
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By Marco Aquino
LIMA (Reuters) – Peru is clinging to its spot as the world’s No. 2 producer and supplier, with a bounce in mining activity helping the Andean country stay just ahead this year of rival producer Democratic Republic of Congo (DRC), which is hot on its heels.
The South American nation has seen output of the red metal rise some 20% in the first half of 2023, government data show, though that’s been tempered by red tape and flagging mining investment after a period of political turmoil and protest.
Peru produced 2.45 million metric tons of copper in 2022. DRC copper output meanwhile — just behind Peru at 2.40 million metric tons last year — climbed 3% in the first quarter, the latest central bank data show, keeping it a close third place. Chile remains by far the top global producer and exporter.
In the first quarter Peru’s output was 619,000 tons versus DRC’s 564,772. Peru is just ahead of Congo also on shipments with 1.4 million tons versus 1.3 million in the first half of the year, separate data from both mining ministries show.
The data suggest the DRC could soon topple Peru from its second spot, especially with mining investment in Peru estimated by authorities to drop 16% this year and 7% next year.
“We are suffering from the absence of world-class projects,” said Gonzalo Tamayo, former Peruvian mining minister in 2016-2017, and now a partner at consultancy Macroconsult, adding most investment was medium-sized projects or expansions. “We have not been able to attract new large investments.”
Peru’s Andes are home to major mining firms including Freeport-McMoRan (NYSE:), MMG Ltd, BHP, Glencore (OTC:), Teck Resources (NYSE:), Japan’s Mitsubishi, and Southern Copper (NYSE:) of Grupo México.
Key to increased production has been Anglo American (LON:)’s $5.5 billion Quellaveco mine, producing a monthly 30,000 tons of the metal, which started operations late last year.
However, Peru faces a looming issue of a lack of new major projects from its $53 billion mining investment pipeline, which will put additional pressure on existing deposits.
Ivan Merino, former mining minister in the government of ousted former President Pedro Castillo in 2021, said the lack of “predictability” in Peru and regular protests was scaring away or delaying investment.
“If you do not have social stability, the viability of projects is going to be difficult. Not impossible, but difficult,” he said.
Newmont Mining Corp (NYSE:) announced in June that it would postpone a decision to invest some $2.5 billion until 2026.
At the end of July, Peru’s government did approve the expansion of the $1.3 billion Toromocho mine of China’s Chinalco and expects to approve a $2 billion expansion plan for the Antamina mine at the end of the year.
Tamayo added though that Peru needed to take action to spur new investment – or risk being overtaken by rival producers.
“If Peru doesn’t get going, if it doesn’t ride this wave, then someone else will,” he said.
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