Committed future. Thousands of direct and indirect jobs are at risk due to suspension of operations. Subnational governments will not have a budget for works due to income reduction. In addition, future investments will be diluted.
He Gross Domestic Product (GDP) of the country is at risk due to the stoppage of the main mining units in the south. Las Bambas, Antapaccay and Costance they suspended their activities due to the social upheaval. These mining operations represent almost 30% of copper exports to the Asia.
High social conflict jeopardizes the future of the country. No investor will take a risk in an unstable country. This is not recent. The conflicts caused progressive paralysis of Las Bambas and Cuajone last year. That already cost the country two billion dollars, explains the former Minister of Economy and Finance Luis Miguel Castilla. With the blockade of roads for 30 consecutive days, invasions in the Las Bambas, Anabi and Antapacca camps, production stopped dead weeks ago. Losses could triple. If the strikes continue, the first quarter of the year will be lost. This will directly affect contracted labor and services.
Daily losses reach ten million dollars for each mining company, adds the spokesperson for Bicentennial Proposals, Luis Miguel Castile.
For the specialist, the losses will become more relevant in the provinces where the companies operate. They pay Income Tax, of the total amount paid to Sunat, 50% returns to subnational governments in mining canon. They also pay royalties. The affectation will be seen in the next year’s budgets.
“Only in Las Bambas we lose almost 10 million dollars a day. If you add Antapaccay, which represents 5% of the country’s copper exports, the amount is incalculable and will harm the province of Espinar and Cusco,” Castilla said.
The conflict in the south of the country not only affects the output of the mining company, but also the entry of equipment for mining activities.
The acquisition of explosives and other inputs that allow operations have also been another factor that has caused the cessation of operations. The blockades prevent the entry of these materials, slowing down the process and finally forcing production to stop dead.
The vast majority of the mining companies that operate in Peru depend on the investment of foreign companies, the social situation of the country leads investors to postpone project expansions, dedicating themselves only to optimizing and operating in a minimal way.
According to Luis Miguel Castilla, although Peru continues to own the resource, it has become an unattractive place for good investments in mining, devaluing its value.
The impact of these stoppages could be reflected in the following weeks with a rise in the dollar to more than S/4, due to a reduction in currencies.
Source: Larepublica
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