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S P EC I A L
P ERU
B I CE N T E N N I A L E D I T I O N
PERU
MINING
2021
Political Analysis - Production and Exploration - Market Trends - Social Management
Engineering & Construction - Equipment & Technology - Services
Dear Reader,
“The people have awakened,” declared Pedro Castillo from a balcony in Lima on
Thursday evening, June 11th, after the narrowest of election victories.
What does a Perú Libre government mean for Peruvian mining? If Covid-19 was the
dominant theme of 2020, then the ramifications of a new government has undoubtedly
been the prominent talking point in over 120 interviews conducted by Global Business
Reports (GBR) in the first half of 2021. Could the situation mirror the Ollanta Humala
presidency in 2011, when he rose to power on the back of anti-establishment rhetoric,
but soon cooperated with market actors when faced with economic reality?
In 2020, investment into Peru’s mining industry totaled US$4.33 billion, a decrease of
over 29% from the US$6.15 billion spent in 2019, according to MINEM figures. How-
ever, the market has rebounded well in 2021. Producers have been looking to make
up for time lost during the three-month lockdown in 2020, spurred on by the surging
copper price, which hit an all-time-high in May 2021, and has remained over US$4/
lb since February.
A bullish sentiment surrounding copper from a medium to long term perspective was
already evident, but few could have predicted how the red metal would thrive during
a global pandemic. Macro fundamentals, such as the growing electric vehicle (EV)
movement and planned infrastructure spending, present a tremendous opportunity for
Peru as the world’s second largest copper producer. To fulfill this potential, political
stability and addressing a cumbersome permitting process are urgent.
Sustainability, meanwhile, has evolved to become an overarching theme impacting all
facets of mining. Rather than being an afterthought at the back of company PowerPoint
presentations, ESG is now at the forefront of corporate strategy. Sustainability is of par-
ticular importance in Peru, where project development has frequently been obstructed
due to a difficult relationship between the mining industry and local communities.
To cover these topics and provide a comprehensive guide to the different companies
involved in Peru’s mining value chain, GBR has renewed its strategic partnership with
the Canada-Peru Chamber of Commerce (CCCP). CCCP is the country’s leading bi-
national mining chamber, and promotes commercial relations and investment as well
as organizing the Peruvian annual presence at the PDAC Convention in Toronto. The
result of this collaboration is the production and distribution of ‘Industry Explorations
- Peru Mining 2021’, an up-to-date review of the current operations and projects and
the latest trends in Peru's mining industry.
We thank all of our interviewees for their time and collaboration. We also thank you for
choosing Peru Mining 2021 as your source of information about Peru’s mining industry
and hope it can contribute to a successful year ahead.
Alfonso Tejerina Jorge León Benavides
General Manager and Director, President,
Global Business Reports Canada-Peru Chamber of Commerce
(GBR) (CCCP)
CONTENTS / PERU MINING 2021
COLOMBIA
Introduction to Mining in Peru 52. Copper Exploration Equipment and Technology
54. Interview with ELEMENT 29 RESOURCES
8. Peru enters a new era – 55. Interview with CAMINO CORPORATION 98. OEMs focus on productivity
What will a Castillo government mean 57. Interview with FORTE MINERALS CORP 100. Interview with FERREYROS S.A.
for Peruvian mining? 58. Precious Metals Exploration 101. Interview with IPESA
12. Interviews with the PERUVIAN INSTITUTE 60. Interview with TIER ONE SILVER 102. Interviews with KOMATSU-MITSUI
OF MINING ENGINEERS (IIMP) and with 61. Interviews with SILVER X and MAQUINARIAS DEL PERU and
LIMA STOCK EXCHANGE (BVL) with PUCARA GOLD LTD. with CUMMINS
Quito
13. Interview with CANADA PERU CHAMBER 62. Zinc 103. Interview with EPIROC
OF COMMERCE (CCCP) 62. Lithium and Uranium 104. Underground Mining Equipment
14. Factsheet 64. Interview with CERRO DE PASCO 105. Interview with DSI UNDERGROUND
ECUADOR 15. Thoughts – Political and Social Analysis RESOURCES 106. Interviews with NORMET PERU and
16. Peru’s copper opportunity 65. Interview with AMERICAN LITHIUM with RESEMIN S.A.
19. Interview with ANGLO AMERICAN PERU 107. Construction and Ancillary Equipment
20. Interview with BEAR CREEK MINING 108. Interview with SCANIA PERÚ
21. Sustainability Engineering, Construction and 109. Interviews with VOLVO PERU and
24. Interview with ENGIE ENERGÍA PERÚ Consultants with DIVEMOTOR
Tumbes 25. Interviews with INTERNATIONAL COUNCIL 110. Equipment Components
Iquitos 68. Engineering and EPCM
TUMBES ON MINING & METALS (ICMM) and with 111. Interviews with FUCSA FUNDICIÓN
APPIAN CAPITAL ADVISORY LLP 70. Interviews with WSP PERU and with CHILCA S.A. and with REXROTH
LORETO
AUSENCO 112. Comminution and Material Handling
71. Interview with WORLEY 114. Interview with METSO OUTOTEC
PIURA
Mining Production 72. Mining Consultancies 115. Interview with WEIR MINERALS PERU
Piura 74. Interview with SRK CONSULTING 116. Interview with MARTIN ENGINEERING
AMAZONAS 28. Copper Production 75. Interview with SANTA BARBARA 117. Interview with TECNOMINA
Moyobamba 30. Interview with MMG-LAS BAMBAS CONSULTANTS 118. Interview with ACEROS CHILCA
Chachapoyas 76. Interviews with AMC CONSULTANTS,
LAMBAYEQUE 31. Interview with HUDBAY MINERALS INC. 119. Innovation and Technology
CAJAMARCA BRAZIL 32. Interview with MINSUR EY PERU and with MINING PLUS 122. Interview with SITECH
Chiclayo
SAN 33. Interview with SOUTHERN PEAKS MINING 77. Environmental and Tailings 123. Interviews with TORSA and with 3M
Cajamarca MARTÍN
34. Factsheet Management
South
LA LIBERTAD
36. Precious Metals 79. Interview with AMPHOS 21
Pacific
Trujillo Pucallpa 80. Interview with KLOHN CRIPPEN BERGER Service Providers
Ocean 38. Interview with GOLD FIELDS
39. Interview with BUENAVENTURA 81. Construction and Contractors
ÁNCASH 40. Interviews with HOCHSCHILD MINING and 83. Interviews with STRACON and 126. Drilling
HUÁNUCO with MINERA PODEROSA with CALIDRA 127. Interview with BOART LONGYEAR
Huaraz
Huánuco 41. Factsheet 84. Interview with PERÚ PIPING SPOOLS 128. Interview with AK DRILLING
UCAYALI
42. Zinc 85. Underground Contractors INTERNATIONAL
PASCO 86. Interview with AESA
43. Interview with NEXA RESOURCES PERU 130. Interview with GEOTEC
Cerro de Pasco
44. MAP – Peru’s Main Producing Mines 88. Interview with INCIMMET 131. Interview with MDH
90. Interview with BYRNECUT OFFSHORE 132. Third Party Services
LIMA
JUNÍN 91. Interview with JRC INGENIERÍA Y 134. Interview with CERTIMIN
Lima MADRE DE DIOS
Junior Exploration CONSTRUCCIÓN 135. Interview with CONFIPETROL ANDINA
Huancayo
92. Raise Boring and Shotcrete Specialists 137. Interviews with SK RENTAL, ACOINSA
Callao
CUSCO
Puerto Maldonado 48. The Junior sector reignites 93. Interview with MASTER DRILLING and with STIERLIFT
Huancavelica 94. Interview with ROBOCON
50. Interview with SOMBRERO RESOURCES 138. Company Directory
HUANCAVELICA Ayacucho
51. Interview with CHAKANA COPPER 95. Interview with MONTALI S.A. 142. Credits
Cusco
Peru Ica
Abancay
APURÍMAC
International Boundary AYACUCHO
ICA PUNO
BOLIVIA
Province Boundary
National Capital
Introduction Mining Junior
Province Capital
AREQUIPA
Puno Titicaca to Peru Production Exploration
N
Arequipa
New government, Editorial analysis and A rejuvenated junior segment
MOQUEGUA La Paz copper booming, and a interviews with Peru’s means drills are turning and
PERU MINING 2021
Industry Explorations sustainable agenda main copper, gold, silver new companies are listing
Global Business Reports Moquegua
TACNA and zinc producers
This research has been conducted by Tacna
Ben Cherrington, Susana Isotupa
and Mariolga Guyon
Edited by Mungo Smith
8, 16, 21 28, 36, 42 48, 50, 58, 62
Graphic design by Gonzalo Da Cunha
A Global Business Reports Publication
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INTRODUCTION
TO
PERU
“Since I have been here I have seen the tremendous
opportunities that Peru’s mining sector presents, and I think this
should be emphasized more than it is. As an industry we need
to sit down with government and figure out how we are going to
capture this opportunity to benefit the Peruvian people.”
- Tom McCulley,
CEO,
Anglo American Peru
GBR • Industry Explorations • PERU MINING 2021
Image courtesy of Anglo American
EDITORIAL Global Business Reports Industry Explorations
Peru Enters a Total Mining Investment In Peru
Source: MINEM
showed. Strong support for Castillo
was also apparent where new mining
sites are being built, including 86.3% of
New Era Billion US$
10
the vote in Torata, where Anglo Ameri-
can’s Quellaveco mine is currently un-
der construction, and 96% of the vote in
9
Haquira, where First Quantum plans to
invest US1.8 billion in a copper project.
8
WHAT WILL A CASTILLO
GOVERNMENT MEAN FOR
7 Will pre-election rhetoric result in
PERUVIAN MINING? tangible change?
6
2019 to 2020
change
Castillo has previously criticized mining
“The people have awakened,” declared 5 -29.6% firms for "plundering" the country's
Pedro Castillo from a balcony in Lima wealth, and has pledged to redraft Pe-
on Thursday evening, June 11th, as the ru's constitution and redistribute profit.
4
final votes were being counted in the However, this raises the point of what is
narrowest of election victories. Cas- rhetoric and what will convert into real
3
tillo’s Perú Libre party won with 50.2% policy.
of the public vote, a 0.36 percentage “I do not think we will get to a point of
2
point lead over Keiko Fujimori’s Fuerza resource nationalization, and we will not
Popular party (by a margin of less than see expropriation,” suggested FTI Con-
70,000 votes). Unfortunately, but per- 1 sulting’s Michael Cullen, drawing paral-
haps inevitably, Fujimori was quick to lels to the situation when former presi-
call foul play, alleging claims of voter 0 dent Ollanta Humala came into power
fraud in a move that evoked former US 2012 2013 2014 2015 2016 2017 2018 2019 2020 in 2011. “The economic reality of the
president Donald Trump’s reluctance to situation dictated that he got straight
concede to Joe Biden. Perhaps the key question is, how did it corrupt establishment. He added: “A into bed with the corporate element of
To add to the drama in the wake of the come to this? The unexpected rise of a relatively uneducated father from a society, despite having ties to Chávez
election, José Domingo Perez, the lead relatively unknown rural school teacher large family in Lima does not want a dis- and rising to power through leftist rhet-
prosecutor in the Odebrecht corruption speaks to how the pandemic has thrown cussion about the benefits of Keynesian oric,” Cullen recalled.
case, urged a judge to send Fujimori politics into upheaval, reported the economic strategies in a time of reces-
back to prison after allegedly meeting Wall Street Journal. Castillo capitalized sion – he simply wants food, shelter and
with a witness. Needless to say, the po- on anger over a market model that left work.”
litical turbulence that has characterized behind the country's poorest, a gap Anthony Hawkshaw, president and CEO
Peru in recent years looks set to contin- that has been particularly evident dur- of Bear Creek Mining (TSXV: BCM), also
ue in the short term, which is a blow for ing the pandemic as hospitals collapsed observed how deep rooted issues of
a country that has suffered more than and oxygen tanks ran out. inequality have been exacerbated. It is not possible to think
most during the Covid-19 health crisis. “Covid-19 has been the fuel onto the “From the mid-90s until 2019, the level
As of September 2021, Peru held the
about fiscal consolidation and
fire of a long-standing and deep-root- of Peruvians living below the poverty
grim title of highest Covid mortality rate ed social and political problem in Latin line dropped significantly, but many of sustainable growth without
per million of population, in addition America,” stated Michael Cullen, man- those people had informal jobs,” re- the mining sector, and this
to experiencing the biggest economic aging director for Latin America at FTI flected Hawkshaw, noting that when needs to be understood by
contraction in South America in 2020. Consulting. Questioning why Latam, the pandemic hit, government-imposed
What exactly the people have awak- which is home to 8% of the global pop- lockdowns left a large section of society
our country’s authorities.
ened to is yet to be seen, but Castillo’s ulation but has accounted for 20% of without the means to provide for their
victory signals the dawn of a new era Covid deaths, has performed so poorly families. “Inequality and poverty, which
for Peru, an era that the country’s mi- in the face of the pandemic, Cullen sug- cause disenchantment, have been en- - Claudia Cooper,
ning sector awaits with trepidation. For gested that populist governmental poli- flamed by Covid,” he added.
many Peruvians, Castillo vs Fujimori cies were not solely to blame. “There is Tellingly, Peru’s key mining regions
President,
was a choice between being shot in the something more endemic and perni- overwhelming supported Castillo, un- Lima Stock
foot or shot in the hand. However, from cious at play, and the root cause is in- derscoring how tensions have risen Exchange (BVL)
the 120 interviews conducted for this equality.” after years of conflict between mining
report, it was clear who Peru’s mining Expanding on the issue, Cullen ex- firms and the local communities. In
industry preferred, and it was not the plained how a rise in leftist politics is provinces such as Cotabambas, Espinar
candidate threatening to retain up to the result of a perfect storm of histori- and Chumbivilcas, over nine out of 10
70% of mining profits. cal inequality, growing poverty and a people voted for Castillo, election data
8 PERU MINING 2021 Industry Explorations Global Business Reports
EDITORIAL Global Business Reports Industry Explorations EDITORIAL
Acknowledging that the current situation might seem similar by a majority of parties which favor the market economy and Gold Fields’ executive vice president of position to rebound strongly in 2021.
to the period before Humala was elected, political commen- private investment as the main driver of the economy. the Americas. Whether this potential is realized is an-
tator and CEO of Viceversa Consulting, Oscar Díaz, warned This sentiment was echoed by Claudia Cooper, president of Expanding on this point, Víctor Gob- other question, and the first months of
that there are two fundamental differences from the context the Lima Stock Exchange (BVL) and former finance minister, itz elaborated: “The mining industry is the Castillo administration will give an
today. “First, Humala signed a roadmap towards the second who emphasized the mining sector’s role in both short-term When you are elected as so important to the country that there indication of what can be expected mov-
round of the election, which represented a moderation of recovery and long-term macroeconomic stability: “It is not president and have to run should be a defined mining policy, in ing forward.
his discourse. Second, he never threatened to close the con- possible to think about fiscal consolidation and sustainable a country whose economy the same way Peru has solid tax policies 2021 is more than just an election year
gress, nationalize industries, or disregard international agree- growth without the mining sector, and this needs to be un- and macroeconomic policies. This would for Peru, it is also recognized as the bi-
ments, like Castillo is doing.” derstood by our country’s authorities.”
is based on mining, you assure continuity regardless of govern- centennial anniversary of the country’s
However, Díaz agreed that Castillo will not be able to nation- According to the IMF, Peru is expected to experience the need to start making ment changes.” independence. However, Roque Bena-
alize the mining industry, as nationalization implies paying strongest recovery in Latin America in 2021 (9% growth), but alliances and thinking Streamlining permitting should be top vides believes that the real bicentennial
huge amounts of money to the affected companies. On June this will be put in jeopardy if protectionist policies that do about improving mining of the agenda for the next mining min- anniversary of Peru’s independence is, in
27th, Castillo stated his willingness to reappoint the head of not attract foreign investment are implemented. Speaking ister, with adjustments to the prior con- fact, in 2024, 200 years after the last bat-
the country’s central bank, Julio Velarde, in a market-friendly in February, Michael Scherb, founder and CEO of Appian
development, otherwise the sultation law of paramount importance tle against the Spaniards was fought. On
move which indicates a path of moderation may be possible. Capital Advisory LLP, stated that he would like to increase economy will fail. to stimulate investment into early-stage that note, he gave a final message to the
Furthermore, Perú Libre will have to contend with a divided Appian’s position in Peru, where the company’s head of La- exploration. “It is essential that political Peruvian mining community: “In these
Congress. tam and COO (Igor Gonzales, formerly of Sierra Metals) is leaders establish consensus and guaran- next three years, the private and public
- Fernando Pickmann,
“Politicians in Peru are similar to politicians all over the world. based. However, he warned: “I speak with the ministers of tee an environment of stability, predict- sectors have to work together to take
They promise a number of things, but do not realize that mines of many countries, and we are clear with the point that Partner, ability and compliance with deadlines,” advantage of the opportunities in front
there are checks and balances in place. In the case of Peru, our capital will go to the path of least resistance and best Dentons said Jorge León Benavides, president of of us,” he said, imploring the industry to
this means the conformation of Congress,” reflected Roque risk-reward.” the Canada Peru Chamber of Commerce become more involved in civil society.
Benavides, chairman of Buenaventura. If Peru is to rebound successfully from the economic devas- (CCCP). “I would say that Peru has a brilliant fu-
Orlando Marchesi, country senior partner at PwC Peru, stated tation caused by Covid-19, a middle ground will have to be Soaring metals prices in 2021 have been ture,” added Benavides, concluding that
that it will be almost impossible for Castillo to carry out any found between Castillo’s ideals and the financial reality of a a catalyst for renewed optimism, and a the election has shown the need to be
expropriations, as the Congress, which was elected during country hugely dependent on its mining industry. mature, well-run mining industry with a more active in contributing to the well-
the first round of presidential elections in April, is made up deep pool of local talent puts Peru in the being of the country. ■
Moving forward: The need for dialogue and collaboration
With copper trading above US$4/lb, the new administration
is blessed with macro conditions as favorable for mining as
anything seen since the previous super cycle that ended in
2011. Long term planning and collaboration are necessary to
make the most of the country’s natural resources. Currently,
the sector consists of a mining portfolio of 46 projects total-
ing a value of more than US$56 billion, and the geological
endowment to increase this further.
Furthermore, an infrastructure deficit worth nearly US$100
billion also offers an opportunity for economic revival. “The
best way to fund infrastructure investment is through the
income provided by mining, generating a virtuous circle for
employment and development,” reflected Víctor Gobitz,
president of the Peruvian Institute of Mining Engineers (IIMP)
and CEO of Antamina.
Although the Castillo election has been a shock to the coun-
try’s mining community, the political circus of the previous
three years, which saw three presidents and five mining min-
isters, has hardly been a beacon of stability. When the dust
settles after the election, the hope is that the new regime
will not disregard the positive work carried out by previous
mining minister, Jaime Gálvez, who was a key figure in the
formulation of the Vision of Mining to 2030, promoted by the
Center for Convergence and Good Mining-Energy Practices
(Rimay).
“It is important to re-start workshops that had to stop due
to the pandemic, where mining companies, government au-
thorities, NGOs and civil society came together to define the
vision of mining in Peru for 2030,” commented Luis Rivera,
10 PERU MINING 2021 Industry Explorations Global Business Reports PERU MINING 2021 11
INTERVIEW Global Business Reports Industry Explorations INTERVIEW
Víctor What are the priorities of IIMP for
2021?
A key priority for the industry and the
solid tax policies and macroeconomic
policies. This would assure continuity
regardless of government changes.
If that is not addressed, we will continue
seeing a decrease in exploration ex-
penditures, which is highly damaging to
Jorge León What issues are currently affecting the
Gobitz country is to tackle the pandemic. Dur-
ing the first wave, Peru was the only mi- To what extent do you think the
a mining country like Peru.
Benavides mining industry in Peru?
The expedition of permits and authori-
ning country that shut down mining op- presidential elections in 2021 could 2021 is the 200 year anniversary of zations that allow mining exploration to
erations, and that was a mistake. So, it is impact Peru’s mining industry? Peru’s independence. By the end of start at the appropriate time is an issue
President a priority to maintain the dialogue with There is going to be a lot of noise. The the year, what changes would you that must be addressed. At present, they
President
PERUVIAN INSTITUTE OF MINING the authorities during the second wave. campaign is going to be throwing lots like to see in the country’s mining in- far exceed the times recorded in other
dustry?
CANADA PERU CHAMBER OF mining countries. Adjustments need to
ENGINEERS (IIMP) Beyond this, we will have a new govern- of populist ideas to the public, and
ment taking over in July 2021. During most probably the new government will Peru’s geological richness offers huge COMMERCE (CCCP) be made to the Prior Consultation Law
this election process, the industry will not have control over Congress. Who- operations like Cerro Verde, Las Bam- so that this is not an impediment to the
have to be active to send its messages ever is elected will need to have a very bas and Antamina, as well as narrow development of mining projects. The
to the public. Over the last two years, fluid communication with the different vein operations and artisanal mines. As eradication of illegal mining and the
we have seen two positive initiatives economic and political actors. a country, we need to promote large creation of better policies for mining for-
by the government, supported by IDB. investments but also formalize the ar- malization is also a pending task.
The first one is the ‘Rimay’ initiative to What were the main themes of the tisanal mining industry that is linked to The country is witnessing large invest-
define a vision of the mining industry IIMP’s ProExplo virtual event in gold production. It is estimated that half ments paralyzed by conflicts with the co-
towards 2030, an effort that needs to March 2021? a million people are involved in artisanal mmunities and a lack of support from the
be continued now at a regional level. ProExplo is focused on the exploration mining, and this industry is not paying central government (Río Blanco, Conga,
The second one was the creation of an segment. One of our objectives is that any taxes and is leaving a wide portfolio Tía María). Peru has a significant portfo-
inclusive working group to work on the those in charge of public policy under- of environmental liabilities. This is the lio of 46 mining projects totaling more
industry’s long-term sustainability. The stand that exploration is a high-risk greatest challenge that needs to be ad- than US$56 billion, many of which are
mining industry is so important to the activity with a minimal environmental dressed by the industry. ■ not being developed for various reasons
country that there should be a defined impact. Yet, the permits are similar to at the speed required and needed.
mining policy, in the same way Peru has those that a mining operation requires. What are the CCCP's main priorities in Also, in a year marked by the presiden-
2021? tial elections, it is essential that political
We know about the financial problems leaders establish consensus and guaran-
many companies are facing in various tee an environment of stability, predict-
sectors, therefore, our management is ability and compliance with deadlines,
focused on providing them with various which will allow for the execution of in-
After a uniquely challenging 2020, to think about fiscal consolidation and on the BVL? tools that allow them to get closer to po- vestments.
Claudia what is the state of the Peruvian
economy at the beginning of 2021?
sustainable growth without the mining
sector, and this needs to be understood
The BVL already has a strong partici-
pation from the mining sector, which
tential clients and replace face-to-face
networking opportunities with virtual op- How could Peru improve its climate
The Peruvian economy has experienced by our country’s authorities. represents almost half of all its listed portunities. Moreover, we have created for junior exploration?
Cooper a dynamic recovery since before the
second lockdown in February 2021, What do you think could be done to
companies. However, the Lima Stock
Exchange’s main challenge is that it
new working committees, such as the
innovation and technology committee
What has to happen is that the large mi-
ning companies regain market value, op-
which was not as strict as the first lock- improve the climate for foreign in- does not have enough liquidity, which is and the gender equity committee, that erational capabilities, and become ag-
down as a balance between economy vestment in Peru? a problem derived from a change in the are added to the mining, energy, infra- gressive investment companies, in such
and health was considered. This recov- Peru has experienced constant changes capital markets. More liquidity will at- structure, social media and sustainability a way that they lead to risk investment,
President ery has been due to two factors: first, of policies in recent years. What the tract more companies, and this is a role committees. that is, exploration.
LIMA STOCK EXCHANGE (BVL) there has been a huge monetary and country needs, rather than more mea- that we have to share with the whole fi- Likewise, one of the tasks that must be
fiscal injection into the economy; sec- sures, is political stability and leader- nancial system. How is the CCCP promoting the Pe- carried out by the government is admin-
ond, the Peruvian economy is very dy- ship, which needs to be built around ruvian mining industry, and what can istrative simplification, with all the rules
namic and volatile, with high levels of a common vision. Mining needs to be In February, IIMP announced Rumbo you tell us about your participation at and processes being clear and rational.
informality, which allows the country to included in this vision as a fundamen- a PERUMIN 2021. Can you tell us PDAC 2021?
adapt quickly to changes. According to tal basis for the country’s development. about this series of events? We have created various business plat- What would you say makes Peru an at-
the IMF, it is likely that Peru will experi- Once we have stable leadership and We decided to carry out Rumbo a PE- forms that will allow our partners alter- tractive jurisdiction for mining invest-
ence one of the strongest recoveries in have decided which direction we want RUMIN as a combination of virtual and native contracting of their products or ment?
the region. our country to go in, the right measures physical events to discuss how to build services in a much more agile and direct Peru continues to be one of the most im-
will come. On the economic side, it is a common vision for the mining sector way with mining companies. The CCCP portant mining addresses thanks to the
What role do you see mining playing necessary to continue promoting mac- and to establish a minimum consensus. also facilitates networking opportunities volume of its reserves and the sustain-
in Peru’s economic recovery? roeconomic stability, commercial open- The objective is to make this event as through one-to-one meetings we gen- ability of its economic and legal policies.
The mining sector is crucial for Peru’s ness and private investment as an en- decentralized and as inclusive as pos- erate for our partners. As for PDAC, we Furthermore, a good level of debt, dol-
economic recovery and macroeconom- gine for development. sible, with hybrid events in the main are focused on maintaining the activi- lar stability, international reserves, low
ic stability as it generates resources and mining regions of Peru, including Areq- ties that Peru has offered year after year, country risk and optimal investor confi-
investment, which at the same time at- Would you like to increase the par- uipa, Apurimac and Cajamarca. ■ which are highly recognized by execu- dence are factors that maintain Peru as
tract more investment. It is not possible ticipation of mining companies listing tives and global investors. an attractive jurisdiction for investors. ■
12 PERU MINING 2021 Industry Explorations Global Business Reports PERU MINING 2021 13
FA C T S H E E T Global Business Reports Industry Explorations THOUGHTS
Peru At a Glance
Source: IMF, data for 2020
GDP Evolution In US Dollar Value
Source: IMF
Political and
CAPITAL
Lima Billion US$
220.19
Social Analysis
230
HEAD OF STATE (projected)
Pedro Castillo, Perú Libre 220
210
202.01
GDP
US$202.01 billion 200 “Covid-19 has been the fuel on the fire of a long-standing and deep-rooted social and
GDP GROWTH 190 political problem in Latin America. Latam is home to 8% of the global population, but has
-11.15% 180 accounted for 18% of Covid cases and 20% of Covid deaths. Why has the region performed
TOTAL INVESTMENT (% OF GDP) 170 so poorly in the face of the pandemic? Commentators have been quick to point out
17.82% 160 populist presidents in Brazil and Mexico who were skeptical of imposing lockdowns,
GROSS NATIONAL SAVINGS (% OF GDP) 150 however that was not the case in Peru which also suffered high death rates. There is
19.1% 140 something more endemic and pernicious at play, and the root cause is inequality.”
CURRENT ACCOUNT BALANCE (% OF GDP) 130
-1.5% 120 - Michael Cullen,
110 Managing Director – Latin America,
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 FTI Consulting
Demographic Data GDP Growth
Source: IMF, data for 2020 Source: IMF 9% “The current situation we are living in Peru might seem similar to the period before
(projected)
%
Humala was elected in 2011. Despite his radical discourse before the election, once he was
7
elected, he understood that re-founding the country was not feasible and that he had to
play by the rules of democracy. There are two fundamental differences with the context
6 today: First, Humala signed a roadmap towards the second round of the election, which
represented a moderation of his discourse. Second, he never threatened to close the
POPULATION 5 congress, nationalize industries or disregard international agreements.”
33.4 4
- Oscar Díaz,
MILLION 3 CEO,
Viceversa Consulting
2
UNEMPLOYMENT
RATE 1
“Most of the areas where the big mining companies operate remain extremely poor.
6.2% 0
2020 Therefore, many communities surrounding mining operations are not fond of our
market economy as it has not benefitted them. The problem is not the market economy,
2012 2013 2014 2015 2016 2017 2018 2019 2021
but rather that the regional and local governments have done a poor job of bringing
-11.15% prosperity to their communities. If we had more efficient government we would have
GDP PER CAPITA been able to build better infrastructure, health and educational services over the last 20
GDP Per Capita In US Dollar Value
years. Regardless of who wins the election, the system has to be reformed.”
US$6,127
Source: IMF
US$
8,500
- Orlando Marchesi,
8,000
Country Senior Partner,
PwC Peru
7,500
7,000
GDP PER CAPITA (PPP) 6,127
6,500
“Many companies in Peru that struggle with social licensing have been around for
US$11,879 6,000
5,500
5,000
decades, and sometimes have a bad reputation due to legacy issues, or if they were in
a region where there has been historical conflict between mining and communities. On
4,500
the other hand, companies which have entered the Peruvian market recently have been
4,000
successful in obtaining their social license to operate. Establishing good relationships
INFLATION RATE 3,500
with the community from the start is key to accelerate the process.”
3,000
4.2% 2,500 - Marcial Garcia,
Partner and Mining Lead,
2012 2013 2014 2015 2016 2017 2018 2019 2020 EY Peru
14 PERU MINING 2021 Industry Explorations Global Business Reports PERU MINING 2021 15
EDITORIAL Global Business Reports Industry Explorations
Peru’s Copper Projected Copper Supply
and Demand Outlook
Opportunity Base Case Production Capability
Source: Wood Mackenzie
Probable Projects Primary Demand Peru produces 2.5 million
Million Tonnes tonnes of copper annually,
35 so every cent the copper
THE METAL OF THE FUTURE IS
30 price goes up represents an
ALREADY THE METAL OF THE additional US$50 million in
25
MOMENT revenue. It is an opportunity
20
the country cannot miss.
15
10
“Copper is the new oil,” stated Gold-
man Sachs in May 2021, citing a surge 5
in green capex combined with the lack - Rómulo Mucho, General
0
of copper mining projects as the fac- Manager, Pevoex
1992 1997 2002 2007 2022 2027 2032 2037
tors that will lead to a multi-year bull
market. Trafigura, the world’s biggest
copper trader, sees the red metal hit- is expected to move into production in Global EV + PHEV (Plug-in Hybrid Elec-
ting US$15,000 a ton (US$7.50/lb) in 2024, according to CEO of Nexa Peru, tric Vehicle) sales reached 3.24 million in
the coming years, according to head of Ricardo Porto, who stated: “There is a lot 2020, compared to 2.26 million for 2019,
copper trading, Kostas Bintas. “Copper of talk about a commodities supercycle and are expected to rise to over 21 mil-
demand is going to be psychedelic,” and the one commodity that is indisput- lion units by 2030. The average petrol
proclaimed Robert Friedland, speaking ably linked to this cycle is copper.” engine vehicle requires 20 kg of copper, have predicted how quickly demand
at Mines and Money London in Novem- Quite simply, everyone is bullish on a hybrid 40 kg, and a plug-in EV 109 kg, would pick up in the short-term, par-
ber 2020 (caveat: he also sells copper). copper, and for good reason. From in- while the cars of the future will need as ticularly in the context of a global pan-
Precious metals producers are on the frastructure-based government stimulus much as 163 kg of the metal. As an ex- demic where economic growth has been
hunt for copper deposits, with Barrick packages, to ‘the green reset’ where Eu- ample of how quickly the switch towards sluggish at best. Surging demand from
chief Mark Bristow describing it as “a rope and the USA are all aligned in their EVs could be completed, in July 2021 China and dwindling copper warehouse
fantastic strategic asset”. Producers of plans to move away from fossil fuels, the the European Union proposed an effec- stocks sent the red metal to an all-time-
other base metals, such as zinc-focused transition will be driven by copper, sup- tive ban for new fossil-fuel cars starting high in May 2021, with futures trading
Nexa Resources, are looking to develop plying material for solar, wind, energy in 2035. over US$4.80, a remarkable figure less
copper projects. In the case of Nexa, its storage systems, electric vehicles (EVs) Although the mid to long-term consen- than a year since copper had cratered to
Magistral greenfield property in Ancash and EV charging stations. sus on copper is favorable, few could 4-year low of US$2.10/lb in March 2020.
Peru, as the world’s second largest cop-
per producer, will undoubtedly benefit
from rising prices. However, there is a
pervasive feeling that the country could
produce a lot more than it currently
does. Multiple large-scale projects re-
main undeveloped, stuck in a quagmire
of permitting complications and commu-
nity conflicts. Even projects with permits
in hand, such as Tía María – the poster-
child of undeveloped Peruvian mining
assets – are not guaranteed to get the
green light, as emphasized by former
president Martín Vizcarra, who stated
that the project would never be devel-
oped under his administration.
If the struggle has been difficult under
moderate governments, how much
worse could it get under Castillo? Which
bank would fund a project when the
State is threatening to take 70% profit?
16 PERU MINING 2021 Industry Explorations Global Business Reports
EDITORIAL Global Business Reports Industry Explorations INTERVIEW
“Peru produces 2.5 million tonnes of copper annually, so ev- of the momentum that high metals prices bring. Not only to
ery cent the copper price goes up represents an additional aid economic recovery, but also because the country’s post- What is the status of the Quellaveco development, and when do you expect
US$50 million in revenue. It is an opportunity the country can- Quellaveco pipeline lacks major greenfield projects. production to start?
not miss,” stated Rómulo Mucho, general manager of Pevoex Money alone will not be enough to ensure projects are given Covid has created a lot of challenges, particularly from a logistics standpoint, but
and president of Agromin 2021. The event, taking place in the green light, as lengthy permitting processes and social our team and contractors have handled it as well as possible. For instance, we
November 2021, looks at creating synergies between mining tension have resulted in a number of high-quality projects be- do approximately 500 random Covid tests per week, in addition around 3,500 to
and agriculture, two industries with intrinsic links to local co- ing held back. 4,000 pre-boarding PCR tests per week. From an overall construction standpoint,
mmunities. “The government does not think mining deserves a dedicated Quellaveco is now over 50% construction complete (as of May 2021). On the opera-
Indeed, unification should be the operative word for the newly State policy, and that damages the industry’s prospects. In- tional side, we have had four autonomous trucks running for over two months now,
elected Perú Libre regime, as conflicting interests have con- vestment arrives in countries with legal and political stability,” with one shovel up and running and a second shovel set to be commissioned in July.
tributed to an unstable political backdrop. Marcobre’s Mina observed Rómulo Mucho, who added that a dedicated, pro- We expect Quellaveco be fully operational in 2022. The exact date is Covid de-
Justa moved into production in July 2021, and combined with active State policy could expedite projects which would yield pendent to some degree, but this is a goal we expect to achieve. We should start
Anglo American’s Quellaveco, due to start in 2022, Peru has good returns. mining ore by the end of 2021, as the project transitions from construction to op-
a platform to produce 3 million tonnes of copper annually by These projects include Jinzhao Mining’s Pampa de Pongo, eration.
2023. However, ironing out social conflicts and establishing a
semblance of political continuity will be key for Peru to con-
tinue this upward trend and close the supply gap with Chile.
particularly attractive with iron ore trading over US$200 per
tonne, and the Río Blanco mine in Piura, which would add over
200,000 mt/y of copper, but mining is pretty much banned in
Tom Can you tell us about Anglo American’s agreement with ENGIE Energía Peru
to provide renewable energy to Quellaveco via the Punta Lomitas wind farm?
this region of Northern Peru, according to Mucho. Even areas
where mining is widely accepted, such as the mining corridor
McCulley We sat down with ENGIE Energía Peru just before Covid to start talking about
what opportunities we have for green energy, and the deal was put together in the
Stimulating Project Development of southern Peru, have seen road blockades which caused a span of less than a year. This sends a message to the mining industry and to Peru
loss of sales worth more than US$500 million to MMG-Las that renewable energy is feasible, and we are very proud to be the first mine in the
With copper trading above US$4/lb since February, free cash Bambas. country that powers its entire operation via renewables. Quellaveco will require
flow is expected to fuel expansions, technology investments, Another of Peru’s copper producers with a project subject to a approximately 187 megawatts, and even on a global level there are very few mines
exploration and M&A. In addition to the need to make up for judiciary process is Southern Peaks Mining (SPM) and its Ariana of this scale that source 100% of their energy from renewable sources. We are very
time lost during the 2020 lockdown, there is some urgency asset. Adolfo Vera, SPM’s president and CEO, weighed in on CEO glad to support additional investment in Peru and the agreement we have with
for Peru to expedite project development and take advantage the matter: “Ariana is a project that SPM will definitely build, ANGLO AMERICAN PERU Engie will provide more jobs to the people of Peru.
as I have always maintained, because there is no technical sup-
port for any of the claims of those who oppose the project.” How do the Caterpillar 794 AC autonomous mining trucks using Command for
SPM hopes to be able to restart construction by the end of Hauling at Quellaveco compare to traditional vehicles?
2021, with production to start by the end of 2022. Vera stated At the moment we are going through a learning curve to see how we can get the
that once in production, Ariana will be a low cost producer, best out of the trucks. For example, when the shovel operator fills up a manual
adding 20,000 mt/y copper concentrate to the company’s pro- truck, if he overflows the load it does not matter, but with an autonomous truck it
file. does matter, because if you drop a rock in the way of an autonomous truck it will
The importance of stimulating project development goes far not operate as it will detect a hazard. However, we expect a significant productivity
beyond the royalties and taxes paid to the government, as improvement in the coming months and years, especially when all the trucks be-
the largest projects create vast ecosystems of suppliers, who come autonomous. We expect between a 10% to 30% improvement in productivity
in turn provide for their families, generating wealth spent in compared to a traditional fleet.
industries such as agriculture, hospitality and consumer goods. At Quellaveco we also made a commitment to the community, that even though we
A large percentage of the 120 companies interviewed for the are using automous trucks we will still hire the same amout of people as we would
2021 edition of GBR’s Peru Mining publication are actively in a manual operation, but some of the jobs will be different than before and we will
working on Anglo American’s US$5 billion capex Quellaveco train the people to be able to work in an digital mine.
project, from engineering through to equipment components,
catering and maintenance. Copper is often talked about in We are very proud to be What are some of Anglo American’s initiatives to increase the participation of
macro terms – the role it will play in the energy transition – but the first mine in Peru that women at its operations?
the jobs it creates also sustain countless families on a micro Across the company this has been a big focus and we are at about 25% participation
powers its entire operation via
level in countries such as Peru and Chile. of women at Quellaveco. It is important to create an inclusive environment where
Discussing the progress of Quellaveco, Tom McCulley, CEO
renewables. all workers feel comfortable.
of Anglo American Peru, revealed that construction was 50%
complete as of May 2021, and mining ore should start by the What message would you give about the importance of fostering a collabora-
end of the year. The mine is expected to be fully operational tive mining climate in the country?
in 2022. “Since I have been here, I have seen the tremendous Since I have been here I have seen the tremendous opportunities that Peru’s mi-
opportunities that Peru’s mining sector presents, and I think ning sector presents, and I think this should be emphasized more than it is. As an
this should be emphasized more than it is,” stated McCulley. industry we need to sit down with government and figure out how we are going to
“As an industry we need to sit down with government and fig- capture this opportunity to benefit the Peruvian people. If we are not careful and
ure out how we are going to capture this opportunity to ben- too many restrictions are introduced, future investment is going to dry up or go
efit the Peruvian people. If we are not careful, and too many somewhere else. All stakeholders should have a fair share, make a fair profit, and
restrictions are introduced, future investment is going to dry have access to development. I think we have done a good job of this at Quellaveco,
up or go somewhere else.” ■ and this is a good example of how we need to do things moving forward. ■
18 PERU MINING 2021 Industry Explorations Global Business Reports PERU MINING 2021 19INTERVIEW Global Business Reports Industry Explorations EDITORIAL
What is the current status of the fi-
nancing package for the Corani proj-
ect (June 2021)?
ment in these regions is an image is-
sue, or more deep rooted?
I think it is more deeply rooted. From
Sustainability proving that an industry with a checkered
history can operate in a responsible man-
ner.
the challenges surrounding mining is ESG
as a route to building stronger relation-
ships with customers and investors, rather
We continue to work with BNP Paribas the mid-90s until 2019, the level of Pe- Has modern mining cleaned up its act? than just a way to reduce criticism.
and Société Générale, who we engaged ruvians living below the poverty line For those within the industry, this goes Indeed, rather than being an afterthought
in 2020 to arrange a senior secured dropped significantly, but many of without saying. However, ask the families at the back of company PowerPoint pre-
credit facility. The main commercial those people had informal jobs. Then MORE THAN A BUZZWORD, ESG of the 270 people killed during the Bru- sentations, ESG is now at the forefront of
terms of the financing have essentially the pandemic hit, the GDP dropped madinho tragedy in 2019, or the Puutu corporate strategy. A report from Morn-
HAS BECOME THE OVERARCHING
been agreed, and the different parties by over 10% and government-imposed Kunti Kurrama and Pinikura communities ingstar released in April revealed that sus-
have completed their due diligence. lockdowns left these people without THEME IMPACTING ALL FACETS whose 46,000-year-old Aboriginal site at tainability-focused funds attracted record
The independent engineers will be the means to make money. Inequality OF MINING the Juukan Gorge was destroyed in 2020, inflows during the first quarter of 2021,
able to sign off on their technical due and poverty, which cause disenchant- what they think of the sector. pushing global assets under management
diligence report after a site visit, but the ment, have been enflamed by Covid. Incidents such as Brumadinho and Juukan in ESG funds to nearly US$2 trillion.
recent outbreak of the Delta variant of Gorge are the ones that make the news “Financial institutions are finally putting
Covid in the Arequipa region has de- What work has Bear Creek been do- Is mining sustainable? The depletion of and capture media attention. Further- their money where their mouth is,” af-
Anthony layed this slightly. This part of the Cora-
ni project financing will be in the order
of US$400 million to US$425 million at
ing to support the Chacaconiza and
Quelcaya communities?
Over a long period of time we have
a finite resource that cannot be renewed
is, in essence, the antithesis of what many
consider sustainability. However, mining is
more, the organizations responsible are
not small backwater operators, but two
of the three biggest mining companies by
firmed Michael Cullen, managing director
Latin America for FTI Consulting, giving
the example of a mining project in Peru
Hawkshaw good commercial terms.
We are also negotiating a subordinated
helped them develop their alpaca herds
and improve the quality of the wool, to
fundamental to a sustainable future in the
transition to an electrified green economy
market cap in the world.
A commodities note written by Daniel
he worked on where a European and an
American banking institution were about
debt facility that would bolt on to the the point where the average family in- that is growing incrementally. For this tran- Litvin for the Financial Times on June to stop financing due to environmental
senior credit facility. The intercreditor come had gone from US$50/month in sition to happen at the pace necessary to 7th titled “Prepare for a ‘supercycle’ in and human rights issues. “If you are a ju-
arrangements are the subject of discus- 2011 to US$700/month in 2019. How- combat the impacts of climate change, a anti-mining activism” suggested that new nior mining company hoping to fake it till
sion as to who disperses first, who gets ever, the alpaca market was drastically greater acceptance of the mining sector is waves of social opposition set to hit the in- you make it before being bought out, that
repaid first, and how they get repaid affected by Covid. We have been able a necessity. In this context, sustainability dustry may change it for the better. Litvin is not going to happen, as a deep ESG
President & CEO out of the project cash waterfall. As to provide some employment on vari- in mining is about doing things better and argued that the common thread linking audit will be performed to ensure that you
BEAR CREEK MINING part of the subordinated debt package ous projects, including building a pow-
we will probably enter into a long-term er line, where we have completed seven
concentrate offtake agreement, which towers of a proposed 17. We have also
will secure our market for several years. provided educational material, radio
The balance of the Corani project fi- signals and internet access so that the
nancing will be raised by equity. children can study from home. Once
the power line is completed, we will put
To what extent has the political situa- up fiber optic cable which will eventu-
tion in Peru impacted the climate for
mining investment in the country?
ally spread to all of the local communi-
ties.
We became one to help our
In my opinion, considering mining in clients develop more
Peru represents over 10% of the GDP Where would you like to see Corani
and 60% of the export earnings, I do by the middle of 2022?
sustainable projects
not expect there will be drastic chang- I would like to see a substantial amount
es to the legislation affecting mining. of the heavy civil work done, the pio- The combined WSP + Golder team
Considering that mining in There may be incremental increases in neer camp virtually complete, detailed strengthens our position as a strategic
the tax burden, but the principal en- engineering complete, and major partner of the mining industry in Latin
Peru represents over 10% of shrined rights in the constitution – such equipment ordered – some of which America.
the GDP and 60% of the export as property ownership and the free ready to be delivered. We also intend to
earnings, I do not expect there movement of currency – will not be augment Bear Creek’s in-house team, We deliver engineering, water, social
will be drastic changes to the changed. It will take the capital markets and have recently hired a new project and environmental services focused on
some time to absorb all of this, but Peru director and a health and safety manag- sustainability and tackling our client's
legislation affecting mining. remains a good destination for mining er. We will need further reinforcements complex future challenges. We know our
investment, with a far stronger bond in HR, environmental specialists, engi- solutions will shape the communities of
rating for its sovereign debt than any neering, metallurgical and communities tomorrow.
other South American country except relations staff.
Chile. In summary, I would like to see an or-
In many of the major mining regions
ganization with around twice as many
people as we currently have, manag-
We are Future Ready®
in Peru Pedro Castillo received a ing a heavy civil works contractor and
large majority of the votes. Do you getting ready to line the water ponds
think the anti-establishment senti- at Corani. ■
20 PERU MINING 2021 Industry Explorations Global Business Reports PERU MINING 2021 21EDITORIAL Global Business Reports Industry Explorations EDITORIAL
comply with their very high international April 2021, multinational EPCM Ausenco Renewable Energy Sources are currently evaluating the possibility of cost of the mining process is its environ- lustration of the situation faced by poor
standards.” released its first sustainability report. Al- using solar power for San Gabriel, which mental impact in Andean communities communities in Peru, using the example
Michael Scherb, founder and CEO of Appi- exandra Almenara, Ausenco’s VP environ- In April 2021, ENGIE Energía Perú, the has an ideal location to benefit from such that have not seen their fair share of the of the Chumbivilcas province, which has
an Capital Advisory LLP, weighed in on the ment and sustainability for South America, Peruvian arm of French multinational elec- an energy source,” revealed Roque Bena- wealth created by generations of mining. 83,000 inhabitants in a remote location
subject: “Today, ESG comes up in nearly outlined what the report hopes to achieve: tric utility company ENGIE, announced it vides, chairman of Buenaventura. Herein lies the challenge of obtaining and over 4,000 m above sea level. “In the re-
every interaction with investors. It used to “Its aim is to compile all our sustainabil- will build a wind farm to supply power to maintaining a license to operate. gion 29 out of 1,000 children do not cel-
be a buzzword, then it became a checklist, ity efforts in different projects and areas Anglo American’s Quellaveco mine, mak- Orlando Marchesi, country senior partner ebrate their first birthday due to the high
and now it has become a real thematic in of the company, and with this constitute ing it the first Peruvian mine to use 100% Sustainable Wealth Creation and Com- at PwC Peru, believes that many of the so- rate of infant mortality. On the environmen-
underwriting,” he said, explaining that it a baseline for our commitment to the fu- renewable energy. Rik De Buyserie, coun- munity Expectation cial challenges to mining in Peru are the tal side, 62% of the garbage and waste in
is an educational process, walking insti- ture,” she said, adding that once all the try manager of ENGIE in Peru and CEO of result of a decentralization process that the region is buried, burned or dumped
tutional investors (like pension plans and independent sustainability initiatives with- ENGIE Energía Perú, detailed that the 260 “The social side of ESG – poverty – is started in 2003. into water sources. In other words, the area
sovereign wealth funds) through the good in the company are understood, Ausenco megawatt (MW) Punta Lomitas wind farm often neglected,” stated Barrick's CEO While the country’s poverty incidence rate is in need of tremendous help.”
that mining does in the world. “This is can start working on more specific, unified will provide approximately 187 MW of Mark Bristow, citing a World Health Or- fell from 58 to 23 percent between 2004 Hudbay intends to bring in a multi-stake-
not just about decarbonization and com- and company-wide measures. green energy in a two-part project. ganization (WHO) report forecasting that and 2014, a large portion of the tax gener- holder approach that delivers investment
modities, which is everyone’s focus, but Gonzalo Covarrubias, general manager of “Firstly, we will convert the current PPAs 100 million people will move below the ated from mining has not been reinvested to Chumbivilcas from many sources, and
involves communities, jobs, health and WSP Peru, explained how the company’s (power purchase agreements) that we have breadline (US$1.90 per day) because of properly. He pointed to the lack of proj- signed a framework agreement in March
infrastructure investment in remote parts consulting services aim to create long- in place into green PPAs; and secondly, we Covid. “Companies that think simply tick- ect management capabilities of regional 2021, committing to invest 11 million
of countries which may not usually receive term relationships between project, com- have signed a green PPA for eight years ing boxes is enough to raise money are in governments, which have not been able Peruvian Soles (around US$3 million) per
benefits,” added Scherb, remarking that a munity and operation, suggesting that from 2029,” explained De Buyserie, noting for a rude awakening, as the pandemic has to invest the Canon Minero (50% income year in social and technical development
lot of sectors can learn from mining’s abili- the mining industry has not been great that ENGIE will also build a 60 km trans- highlighted that the world is not a platform tax generated from Peruvian mining com- projects. However, Del Rio warned that the
ty to bring different stakeholders together at communicating its role in supplying mission line to connect the wind farm to for exploitation,” he added. panies) correctly. task requires support from more than just
as part of a final product. global demand for sustainable technolo- the national grid. The majority of regions where mining is “This has created conflicts between the the private sector: “Regardless of who wins
The International Council on Mining and gies. “We need to clearly communicate The Ministry of Energy and Mines (MINEM) prevalent remain poor, despite companies mining companies and local communi- the election, sustained investment and de-
Metals (ICMM) has set out a list of Mining why we mine metals – as they are vital for granted the concession on the Punta Lo- and their shareholders making huge prof- ties,” he said, noting that unspent funds velopment is needed in the Chumbivilcas
Principles, created on the understand- development; and how we mine metals – mitas wind project for both generation and its. It is one of the reasons why anti-mining provided to regional governments (be- province, and this cannot be achieved by
ing that the decarbonizing of the global by having a responsible mining and strong transmission, and ENGIE expects to start sentiment exists, and one of the reasons tween 30% to 40% of the total paid) are one company alone.”
economy and meeting the UN Sustainable relationships within the communities that plant construction in the second half of politicians like Pedro Castillo rise to power. returned to the Ministry of Economy and The hope for Peru, its mining industry and
Development Goals (SDGs) requires a sus- we operate.” 2021. De Buyserie elaborated on the en- After it has been mined, copper does a Finance. Stating that both the regional and local communities is that the experience of
tained demand for metals and minerals Covarrubias emphasized the need to vironmental benefits of the project, stating number of good things, but its extraction local governments have done a poor job mislaid promises and legacy issues is part
over the coming decades. communicate with local communities, that the Punta Lomitas wind project will re- presents the moral issue of global benefit of bringing prosperity to their communi- of a learning curve that leads to clearer
“The mining sector is the backbone of the governments, clients and employees in duce CO2 emissions by 230,000 mt/y. vs local cost. One of the most tangible ties, Marchesi reflected: “If we had more communication from the early stages of a
transition to a net zero emissions econo- unison rather than in silos, accentuating He also underlined that ENGIE is building ways to eradicate poverty is through the efficient governments, we would have project. Castillo’s Perú Libre government
my,” stated Rohitesh Dhawan, new ICMM the importance of long-term planning that the wind farm without any subsidies from construction of wells and pipes to supply been able to build better infrastructure, has been elected with a mandate to dis-
CEO, who brings a wealth of sustainabili- considers climate change, wealth-creation the government, adding: “It is great news water to third world communities, giving health services and educational services tribute wealth more evenly, but to achieve
ty-focused experience to the role. Dhawan for communities and how technologies for future development if you can be envi- single mothers the chance to care for their over the last 20 years.” this, collaboration rather than demoniza-
cited the World Bank estimate that there will evolve. ronmentally-friendly but also competitive children or work rather than walk miles to Javier Del Río, VP business unit South tion is a must for a country that relies on its
will be a 500% growth in the demand for American multinational conglomerate 3M from a cost perspective.” collect water each day. However, the local America for Hudbay Minerals, gave an il- mining industry. ■
critical minerals required for this transition. is involved in the full lifecycle of mining Tom McCulley, CEO of Anglo American
To underline the importance of the mining projects, providing consumables such as Peru, related that the deal with ENGIE
sector, he gave the example that if the UK PPE and electrical solutions for connectiv- was put together in the span of less than
alone was to convert all its petrol and die- ity and energy. Luis Palenque, 3M’s presi- a year, with the two companies entering
sel cars to electric cars today, it would take dent and managing director for the Ande- discussions just before the Covid outbreak
up twice the annual global production of an Region, mentioned that the company in 2020. “This sends a message to the mi-
cobalt. “Therefore, mining will be a funda- invests more than 6% of its global income ning industry and to Peru that renewable
mental pillar of vehicle electrification, and into innovation, which represents over energy is feasible,” he said.
for the production of other important ele- US$2 billion per year, with sustainability Peru also has abundant solar energy sourc-
ments to reach carbon neutrality such as at the core of its R&D. “3M’s sustainabil- es, particularly in the south of the country,
solar panels or wind turbines.” ity strategy includes new objectives, such a source of power that has dramatically re-
Dhawan went on to emphasize that the as achieving 30% less carbon emissions duced in cost in the past decade. A report
way minerals are produced is also im- within the next 10 years, 30% less water from the International Renewable Power
portant. In the past, mineral production consumption by 2030, and zero-carbon Agency (IRENA) presented data showing
contributed 4-7% of global greenhouse footprint by 2050. To help achieve this, the global weighted-average LCOE (lev-
emissions. the company has already invested US$1 elized cost of electricity) of utility-scale
Achieving tangible change will require billion towards reaching its sustainabil- solar PV is set to fall to US$ 0.039/kWh in
the buy in of the full mining supply chain, ity goals,” detailed Palenque, noting that 2021, lower than any fossil fuel-generated
including the engineering firms and con- even as a customer, 3M selects suppliers source. In addition to their environmental
sultancies that design projects and advise and companies based upon how sustain- benefits, renewables are now becoming
on environmental and social strategy. In able they are. an economically sound alternative. “We
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