Peru Expects Record 2014 Mining Investment
President Humala Made Statement in Television Interview
LIMA, Peru—As companies develop new projects expected to boost the country's mineral output, Peru is expected to see a record inflow of mining investments in 2014, President Ollanta Humala said.
Mr. Humala said in a year-end television interview that mining investments are expected to total $14 billion next year, which would be an annual record.
The mining sector is an important source of private-sector investments in Peru, one of the world's biggest producers of base and precious metals. In 2012, Peru's mining investments totaled a record $8.6 billion. Mines and Energy Minister Jorge Merino said recently that mining investments this year will be greater than in 2012.
Peru has a pipeline of mining projects worth some $55 billion. New projects are expected to more than double Peru's copper production by 2016, according to the government. Peru is the world's third biggest producer of copper. It is also a major producer of gold, silver, and zinc, among other minerals.
Economists say the increase in mineral production will support Peru's economic growth over the next few years as metal prices have weakened. Peru's economy has slowed this year in large part due to lower metal prices, which have hurt exports.
Large-scale mining projects being developed in Peru include Glencore Xstrata GLNCY +0.23% PLC's $6 billion Las Bambas copper deposit, a $4.4 billion expansion at Sociedad Minera Cerro Verde SAA, and HudBay Minerals Inc. HBM.T +0.35% 's $1.8 billion Constancia project.
Government officials also expect companies to restart work at a number of projects that have been put on hold due to community opposition. In December, officials said that Southern Copper Corp. SCCO +1.43% could receive government approval for its delayed $1 billion Tia Maria project in the next 90 days and start construction in the second quarter of 2014.
Work at Newmont Mining Corp.'s NEM -1.04% majority-owned Minas Conga copper and gold project, which will require investments of $5 billion, could also restart in 2014, government officials said recently.
Violent protests against Minas Conga in 2012 led the company to suspend work on the construction of the mine. The company is currently building water reservoirs that it hopes will help it win over local support by ensuring communities' water supply.
The conflict over Minas Conga's was one of President Humala's main challenges during his first year in office. The successful development of the project would be a victory for Mr. Humala's administration and a sign that his government is able to resolve community opposition that has delayed billions of dollars in mining investments.
During the interview, Mr. Humala said he backs the development of Minas Conga, but stressed that his government is more focused on helping residents in Cajamarca by developing infrastructure and providing social programs.
"For me the people are more important," Mr. Humala said. "Conga is trivial in the history of the country."