Peru's Mining & Metals Investment Guide 2022/2023

Economic overview

Peru, a country of 33.0 million people, is one of Latin America’s fastest-growing economies. It has rich deposits of copper, gold, silver, lead, zinc, natural gas and petroleum. It is also a very diverse country due to climatic, natural and cultural variations of its regions. Peru’s economy reflects its varied geography, an arid coastal region, the Andes further inland, and tropical lands bordering Colombia and Brazil. Abundant mineral resources are found mainly in the mountainous areas, and Peru’s coastal waters provide excellent fishing grounds.

Mining is the dominant sector of the Peruvian economy. Substantial additional investment has flowed to the sector over the past 20 years. As a result, there has been an increase in exploration and development activities. Peru is among the major producers of mineral commodities in the world. They account for nearly 60% of the country´s total exports. Copper and gold are the most important mineral exports by value.

In recent years, Peru has achieved significant advances in social and development indicators as well as in macroeconomic performance, with very dynamic GDP growth rates, reduction of external debt, a stable exchange rate and low inflation. Peru’s rapid expansion has helped to reduce the national poverty rate from 58.7% in 2004, to 30.1% of its total population in 2020. Extreme poverty declined from 17.1% to 6.3% over the same period.

The country has had continuous economic and political stability since the early 1990s. While Peru suffered its worst GDP contraction in three decades in 2020 (-11.0%) due to the outbreak of the COVID-19 pandemic, economic activity has rebounded at a good pace. The Peruvian economy has fully recovered to pre-pandemic levels.

(1) Projection. December 2021 Inflation Report
(2) As of September 2021
Sources: Central Reserve Bank of Peru (BCRP), National Institute of Statistics and Information (INEI) 

Peru’s Investment-Grade Rating

Peru has maintained its investment-grade credit rating since Moody's Investors Services raised it to that level in December 2009 matching moves made by Standard & Poor's and Fitch Ratings the previous year. The country's stable, credible, and consistent macroeconomic policies in various administrations are the key supporting factors for the investment-grade rating.

It is well known that countries with investment grade ratings gain a higher level of confidence that generates more foreign and domestic investment. The risk premium demanded by multinationals and foreign investors is slashed after the upgrade. At the same time, the investment horizon is elongated.

The upgrade to investment grade has brought Peru a lot of positive attention worldwide. More importantly, it has had a positive impact on the local economy. For this reason, nowadays, many multinational corporations eye the country more seriously, as higher private investment is flowing into the country. This should contribute to alleviate a still complex social situation in Peru, by achieving improvements in employment and decreases in poverty.

As of February 2022
Sources: Standard & Poor’s / Fitch Ratings / Moody’s

Importance of Peru’s mining sector

The mining sector is and has always been very important to the national economy of Peru. The mining tradition dates to the pre-Inca times, and goes on through the Inca, colonial and republican periods. In each of those stages, mining has been one of the major activities in the country’s development. Traditionally it has contributed about half of the country’s export revenues.

Peru is one of the most extensively mineralized countries of the world. It currently plays host to some of the world’s major mining companies, including, Glencore, Freeport-McMoRan, Rio Tinto, Anglo American, MMG, Teck, Chinalco and Barrick. Since the liberalization of the industry in the 1990s local and foreign investment has been deployed to develop major modern mines.

Peru has a well-recognized mineral wealth. It is considered one of the top ten richest mineral countries in the world. It is one of the world’s biggest producers of base and precious metals. Currently, it is the world´s second largest producer of copper and it is also a major producer of gold, silver, zinc, among other minerals. Peru has 8.7% of the world’s copper reserves, 3.7% of its gold, 22.6% of its silver (3% more than last year), 7.6% of zinc, 7.1% of lead and 3% of tin reserves (0.7% more than last year), according to the most recent data published by the US Geological Survey.

Today the mining sector accounts for nearly 10% of the GDP, while mineral export revenues reached USD27.2 billion in 2021, representing 60% of the country's total exports. Copper was the leading export metal, in terms of value, followed by gold, lead, zinc, iron, silver, tin and molybdenum. 

Source: Ministry of Energy and Mines (MINEM)

Source: Ministry of Energy and Mines (MINEM)

According to the Central Bank, Peru's economy grew 13.3% in 2021, bolstered by soaring growth in key mining and fishing sectors, after declining by 11.0% the previous year due to the COVID-19 pandemic.

There is an estimated USD 53 billion of mining projects waiting to be developed in the country.

Leader in the industry

International investors are a crucial part of the growth and success of Peru´s exploration and mining industry. Peru welcomes foreign investment with an open and stable mining regulatory environment. A foreign investment law guarantees the security of foreign and domestic investments. Peru's clear and simple mining law and excellent geological potential has helped the country to attract one of the largest budgets for minerals explorations and development in the world.  Furthermore, Peru is consistently undertaking measures to improve its business climate to attract more investment.

We invite you to contact us with your questions about the mining investment opportunities in Peru.