Mining investment will fall -14.1%: there are no more large mines

Only three confirmed projects for just over US$834 million will be developed in Peru in 2024. These are Yumpag (US$81 million), Corani (US$603 million) and Romina (US$150 million). If Antamina Replenishment (US$2,000 million) is added, which until two weeks ago had not had its Environmental Impact Study Modification approved (MEIA)—despite the fact that, since 2022, MEF was already promising the expansion of the Ancashina mine by 2023—, mining investment could more than double in that year.

But it is still a long way from the US$5.5 billion it demanded. Quellaveco for its construction, which finished last year. This is the reason for the resounding fall this year, in which no other large deposits were made viable for Peru.

A lost year, in terms of mining promotion, despite the fact that it is a sector that contributed 8.7% of GDP in the last decade and contributed with close to 60% of exports.

There are other projects that currently leverage mining investment (which in October accumulated an annualized drop of -13.5%), such as San Gabriel (US$470 million) and phase II of the Toromocho Expansion (US$815 million), but the latter ends in April 2024. From there, again another fall.

Rebound effect

Rómulo Mucho, former Vice Minister of Mines, warns that in 2024 a rebound effect will occur with mining investment figures, but because 2023 was very bad. The Zafranal mine in Arequipa (US$1,263 million), another medium-sized mine, is still scheduled for 2025, if it is not delayed as has been the mining tradition in Peru.

The BCRP itself recognizes that private investment contracted 8.9% year-on-year between January and September as a result, among others, of the “absence of new megaprojects and lower residential investment.”

The fall in sectoral investment projected by the issuing entity in 2023 will be -14.1%, the second most terrible since 2020 (-25.3%), when the pandemic paralyzed everything. But it expects growth of 5.1% and 4% for 2024 and 2025, respectively.

The heavyweights on the horizon, but who are not clear about the start of their construction, are The farm (US$5,000 million), El Galeno (US$3,500 million), Michiquillay (US$2,500 million), Yanacocha Sulfuros (US$2,500 million), Hierro Apurímac (US$2,900 million) and Conga (US$4,800 million).

The MEF does not lose hope and is already counting on Glencore’s upgrade from US$590 to US$1,500 million in Integración Coroccohuayco and the promise of US$2,000 million until 2027 Minsur in Mina Justa and Raura. More expansions.

However, Mucho sees the need for greater gestures, in days when the Peru will close with 2.7 million MT of copper per yearhigher than the 2.4 million in 2022. He sees an opportunity in the unlocking of Tía María.

“We need an emblematic project. Nothing indicates that 2024 will be better,” she says.

X-ray of mining to receive 2024

In the mining sector, investments between January and October 2023 totaled US$3,591 million, mainly from the companies Antamina (US$447 million), Anglo American Quellaveco (US$345 million) and Southern (US$268 million).

The lithium potential in Falchani has been talked about at length, but its construction does not represent an investment greater than US$880 million.

Antofagasta Minerals bought 19% of the shares of the Peruvian company Bonaventure. The operations of Trapiche (US$1,038 million) and Coimolache Sulfuros would be on the radar.

Las Bambas hopes to put its pit in Chalcobamba into operation in July or August 2024.

Figures

• US$8,616 is the price of a ton of copper on the London Stock Exchange shortly after the end of the year.
• -8.9% was the fall in private investment in Peru between January and September 2023.
• 46 projects for US$53,130 million are maintained to date in the mining investment portfolio.