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Recent Study: Peru Mining Report Q1 2014

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2014-01-04 05:32:49 - New Materials research report from Business Monitor International is now available from Fast Market Research

We forecast Peru's mining sector will grow steadily over the coming years, driven primarily by investment in both base and precious metals. We therefore expect Peru's mining sector will grow an average of 4.4% a year through to 2017, reaching a value of US$23.1bn. Various projects remain in early development and construction phases, and the sector presents promising growth opportunities for miners of a wide array of minerals. Investment from mining companies through to 2020 is currently estimated at US $53bn, although continued protests by local communities may reduce this figure as project delays mount and costs continue to rise.

Peru is a major global producer of several base and precious metals and we expect this mineral diversification to benefit miners

exploring for and developing new deposits. The country maintains one of the strongest project pipelines in the Americas region, with copper projects accounting for the largest proportion of new mine projects and expansions. The sector is dominated by global copper mining majors including Southern Copper (a division of Grupo Mexico), Freeport McMoRan and Glencore Xstrata, which are boosting output by both expanding existing operations and undertaking new investment projects.

Full Report Details at

Although Peru will remain a key global producer of other metals such as zinc, silver, and tin, we see more modest production growth for zinc and silver, and a slight contraction for tin. We forecast tin prices will remain elevated, but expect miners to face particularly high hurdles developing and financing new tin projects, thus leading minimal growth in output over the forecast period.

We see Peru's government maintaining a favourable environment for mining investment, though risks remain. We believe President Ollanta Humala will continue pursuing moderate policies, seeking to attract foreign investment while increasing social spending and implementing more accommodative policies towards Peruvian citizens and interest groups opposed to mining development. The tax code remains competitive, particularly now that the Mexican government has imposed high mining royalties. Peru and Mexico produce many of the same metals, giving Peru a relative advantage. On the other hand, sustained mining protests have already put projects on hold and threaten to do the same for others. The public outcry over the environmental and social impact of mining activities will hinder the development of large-scale projects, as exemplified by continued suspension of Newmont's Conga mine expansion.

Efforts such as the Prior Consultation Law appear to find a balance between preserving mining industry growth, essential to the country's economy, and respecting local concerns towards mining's negative impacts. However, critics have noted that the law has not been evenly applied, leading to accusations that the government actively favour the interests of miners over local concerns. Neighbouring Chile is facing similar problems in its mining sector, though is less diversified in its mineral production, with copper being its main export. Furthermore, Michelle Bachelet, whom we expect to win this month's presidential election, has proposed higher corporate taxes, and the sector is already grappling with higher labour and energy costs. The business environment for mining firms in Argentina and Bolivia remains poor, and the Brazilian government is seeking to raise mining royalties. Therefore, we see Peru maintaining its relative regional competitiveness.

Partial Table of Contents:

BMI Industry View
Industry Forecast
- Copper: Growth Ahead Despite Environmental Concerns
- Output Growth To Continue
- Table: Peru - Major Copper Projects In Development
- Weak Prices Present Downside Risk
- Protests Remain Ongoing Issue
- Table: Peru - Copper Production
- Gold: Prospects Tarnished By Protests
- Protests & Prices May Discourage Investment
- Table: Peru - Gold Production
- Lead: Modest Growth In Coming Years
- Potential Complications
- Table: Peru - Lead Production
- Silver: Peru To Coninue To Lead Output
- Table: Peru - Key Silver Projects
- Large Projects To Face Increasing Scrutiny
- Table: Peru - Silver Production
- Tin: Production Declines To Continue
- Mixed Outlook For Minsur
- Table: Peru - Tin Production
- Zinc: Mixed Outlook Despite Production Growth
- Table: Peru - Key Zinc Projects
- Optimistic, Though Cautious, Outlook
- Table: Peru - Zinc Production Forecast
Industry Risk Reward Ratings
- Americas - Q1 2014
- Table: Americas - Mining Risk/Reward Ratings
- Local Opposition Remains Potent
- Royalty Threat
- Country Highlights
- Chile: Despite Rating, Potential Vulnerabilities
- Canada: Solid Developed World Destination
- United States: Slow Growing Giant
- Peru: Strong Prospects But Protests Maintain Pressure
- Colombia: Coal Holds Promise
- Brazil: Complexities Abound
- Mexico: Domestic Fundamentals Favourable, For Now
- Argentina: Clear Potential Amid High Risks
- Central America: Frontier Market Opportunities?
Market Overview
- Table: Peru - Select Future Projects
- Growth To Continue Despite Subdued Prices
- Mining Sector Remains Driver Of Growth
- Table: Peru - Mining Industry Value And Production
Regulatory Development
- Recent Developments
- Managing Mining
- Tax Regime
- Endemic Corruption
- Table: Peru - Political Overview
- Table: Regional Regulatory Ratings
Commodities Forecast
- Commodity Strategy
- Iron Ore: Prices To Head Lower In 2014
- Steel: Reprieve Unlikely To Last
- Aluminium: Weakness Resuming
- Copper: Continued Weakening
- Lead: Modest Secular Uptrend To Remain Intact
- Nickel: Can't Catch A Break

Full Table of Contents is available at:

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at

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Bill Thompson
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