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.
LONDON, Nov 1 (Reuters) – Peru aims to simplify mining permits to attract new investment while high metals prices are expected to help spur $10 billion of new mining projects next year, Mining Minister Cayetana Aljovin said on Wednesday.
“We have this window of opportunity with the increase in prices, especially copper and zinc,” she told Reuters in an interview in London during metals industry gathering LME Week.
“This is making projects that were on hold to be revived.”
Mining investment in Peru, the world’s No. 2 copper and zinc producer, is set to fall for a fourth straight year in 2017, but Aljovin expects it to bounce back in 2018.
“I’m sure that next year we will see private investment in mining growing very fast … I want to simplify the permits,” she said, without giving details on how applying for mine approvals would be streamlined.
Aljovin said some of the projects expected to get the green light in 2018 are Anglo American’s Quellaveco copper project and the Michiquillay deposit, which the country is due to auction on Dec. 20.
Others due to be approved are iron ore deposit Pampa de Pongo, owned by China’s Jinzhao Mining Peru, and Minsur’s copper project Mina Justa, she said.
ENVIRONMENTAL PROTESTS
Mining accounts for about 15 percent of gross domestic product in Peru while minerals make up some 60 percent of export earnings.
Protests by communities worried about environmental damage from mines have slowed or stopped other projects, but Aljovin believes the situation has improved and vowed that government would help by working to build infrastructure.
“The mines nowadays, the process and technology they use are very different from the past. Also our rules for the environment have improved a lot in recent years,” she said.
“But I think they have to show these improvements to the communities so they can be aware.”
Aljovin, who took over as mining minister in July, said the government planned to help create a more favourable environment for mining in remote communities.
“The state has been very absent in some of these (rural) territories. Now the state understands the government has to go there and provide health, roads, sanitation, electricity, communications,” she said.
“This will create a new environment for the mining industry to get settled there.”
(Reporting by Eric Onstad; Editing by Louise Heavens and David Evans).
