Peru - Mining Equipment and Machinery

Mining Equipment and Machinery

Last published date: 2023-12-30

Overview

With a mining tradition stretching back to pre-Inca civilizations, today the mining industry is integral to Peru’s economy and a key driver of its development. According to the Ministry of Energy and Mines, mining accounted for an average of 15 percent of GDP each year from 2017 through 2021 (latest available). The government is actively working to improve the investment landscape and attract foreign capital.

Peru is among the most mineral-rich nations globally and a leading producer of copper, gold, silver, and zinc, among several other commodities. Peru’s proven reserves account for 9.1 percent of the world’s copper, as well as sizeable shares of silver (17.8 percent), gold (5.6 percent), zinc (8 percent), lead (6.2 percent), and other metals. Major firms such as Southern Copper, Freeport-McMoRan, Barrick Gold, and Volcan Compañia Minera have invested substantially since the 1990s to develop modern mining operations.

Opportunities

Peru presents substantial business opportunities in mining for international investors seeking to participate in the country’s growth. Mining investment in Peru totaled $5.4 billion in 2022, spanning infrastructure, equipment, exploration, mine development, beneficiation plants, and more. Peru is the world’s 2nd largest copper producer and has substantial reserves of copper, gold, silver, zinc, lead, and other metals. There remains strong potential as less than one percent of land has been explored and just over one percent of reserves are under development. Major mining projects totaling $53.7 billion are still awaiting development. With its rich mineral deposits, stable mining regulations, and untapped potential, Peru offers compelling mining investment prospects.

Table: Mining Investment by Production type in USD Millions
	2020	2021	2022
Benefit plant	1,440	1,410	1,346
Mining equipment	744	751	703
Exploration	224	336	429
Infrastructure	858	1,402	1,325
Development and Preparation	384	597	931
Other	677	767	631
Total	4,327	5,263	5,365

Challenges

The mining sector in Peru faces several critical challenges including strong anti-mining protests and disruptions, which escalated in 2022, due to social and environmental concerns. The government has at times had a national resource approach to its mining, leading to unpredictable stances on mining projects, which can create uncertainty. Logistics risks are also high, which can raise supply chain costs. Poverty, inequality, and environmental issues drive social unrest in some regions. Declining ore grades are weighing on production growth in gold and tin, requiring major investments. Illegal mining remains a problem, with very limited success in fully formalizing the sector. The tax regime is relatively onerous, burdening mining firms. Political power struggles among national-level institutions some degree of economic uncertainty will likely persist, reducing the sector’s investment appeal. High inflation threatens to curb investment and economic growth. Finally, investment has been focused on copper, gold, and iron, leading to a neglect of other minerals like zinc, silver and tin.