In the midst of a presidential election, Peru mining sector reports mixed results

(Reference image courtesy of Antamina).

As Peru goes through yet another presidential election, the Ministry of Energy and Mines (Minem) made public its most recent dataset, which shows that copper production rose by 0.7% in February 2021, compared to the previous year.

According to the report, Peru produced 170,989 tonnes of copper in the second month of the year, which is more than what was produced during the same period last year but which represents a 3.1% fall compared to January 2021.

The improved y-o-y performance was led by Antamina, which is owned by BHP, Glencore, Teck and Mitsubishi and was responsible for 22% of the production; Aluminum Corporation of China’s Chinalco Peru, with 12.4% of the production; and Glencore’s Compañía Minera Antapaccay, with 0.4%.

When it comes to exports, copper grew by 21% in the first month of 2021 compared to the previous year

Copper makes up for 4% of the South American country’s GDP. Thus, by year-end, the Minem expects copper production to reach 2.5 million tonnes, which would be a 16% increase compared to 2020.

When it comes to exports, copper grew by 21% in the first month of 2021 compared to the previous year. But the red metal wasn’t even close to being the best performer, as iron ore exports shot up by 132.4%, molybdenum by 76.4%, lead by 58%, and silver by 49.7%.

Overall, mining exports filled Peru’s coffers with $2.5 billion in January 2021, an 8% increase year-on-year.

Gold, on the other hand, fell both in exports and production. Exports dropped by 14.2% in January, while output was 25.5% below in February than what was registered in the same month last year. 

According to the Ministry, lower production rates were the consequence of lower grades at Minera Yanacocha; covid-19-related restrictions for Minera Poderosa’s personnel, and lower volumes for Minera Aurífera Retamas. Together, these three companies are responsible for over 25% of Peru’s total gold production.

Peruvian far-left candidate Pedro Castillo is set to win the Andean country’s first-round presidential election, though he will face a run-off vote in June with an electorate fragmented after a year of political and economic crisis.

The 51-year-old union leader and primary school teacher, a shock winner after a late surge in the polls, had 16.2% of the vote with half the ballots tallied on the official count. A fast count from Ipsos Peru showed him winning the race.

That level of support falls well short of the majority needed to win outright, however, meaning Castillo will face the second-place candidate in a head-to-head vote.

Active mines and projects

The Ministry of Energy and Mines also reported that in February, 607 metallic and non-metallic mines were active, while 327 were in the exploration phase. Together, these operations occupy over 1.6 million hectares or 1.26% of Peru’s landmass. 

In terms of mining projects, the Minem said 60 greenfield and brownfield mostly gold, copper, silver and zinc projects are in the exploration phase, with total investments adding up to $506 million.

(With files from Reuters)