Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
About 1,000 of the 55,000 active mining concessions in Peru, or a 1.8%, are currently in full swing, a study published this week by the country’s Ministry of Energy and Mines (MEM) reveals.
While the South American nation has 7 billion tonnes of copper reserves and 74 million ounces of gold waiting to be extracted, according to USGS data, only a few companies are actually going ahead with their planned exploration and extraction activities.
The situation, however, won’t go on for long. According to Latin Pacific Business News (in Spanish), the country’s concessions department’s director Luis Barranzuela said around 15,000 titles have passed the seven-year mark granted by the government. After that period, title-holders are required to either have begun operations or reached an annual minimum production (AMP) rate per hectare or risk penalties and even losing all privileges over the land.
“Producing mines we don’t have many, around 500 to 1,000,” Barranzuela said. “And that figure includes those run by global mining companies,” he added.
According to official data provided by the MEM, there were 940 concessions to June this year, with 461 already producing at 479 still in the exploration phase. Most of them (63.4%) mine for copper, while 13% of them go for gold and 12% for iron ore.
Peru plans to double its current copper production of 1.4 million tonnes by 2016 and so recover the second position among the world’s largest production of the industrial metal.
