LIMA, SEPTEMBER 22 2021 Wood Mackenzie: "Peru's copper production could be halved by 2040 if no investment is made"

The head of Metals and Mining Consulting at Wood Mackenzie, Patrick Barnes, highlighted that copper mining production in Peru has increased in recent decades; however, he stressed the need to continue focusing on new investments so as not to stop this rhythm in the medium term.

"We see that copper production has grown a lot and has the potential to grow in the next four to five years because of the mines that are under construction and are about to be approved; but if there is no expansion or an extra investment, we see that production in 2040 could be half of what we see today", he said.

Without investment, 1 million direct and indirect jobs could also be lost by 2040. This he said during his participation in the "Competitive Fiscal Policy" block of Heading to PERUMIN - Bicentennial Edition, which was held on Wednesday, September 22.

Another issue analyzed by the Wood Mackenzie representative was Peru's competitiveness in the global mining industry.

In that sense, he pointed out that "Peru's historical competitive advantages are being eroded, as copper quality declines and costs rise."

"With more 'ordinary' competitiveness in terms of costs and infrastructure, Peru's ability to attract investment will increasingly depend on its fiscal policy and perception of environmental, social and governance risk," he said.

Tax regime

Furthermore, Patrick Barnes stated that our country already has a high tax burden, compared to other notable mining countries in the region such as Chile, Colombia and Brazil.

"A preliminary analysis indicates that changes to the tax regime could impact the competitiveness of the Peruvian mining industry," he said.

A similar position was revealed by the president of the Private Competitiveness Council and former Minister of Economy and Finance, David Tuesta, in his presentation.

He added that a good fiscal policy in the mining sector does not only depend on how many taxes are generated and what the appropriate tax structure should be.

"Sometimes the best fiscal policy depends on what the institutional framework of efficiency is, on the political climate and, in general, on whether it manages to promote greater activity," said David Tuesta.

Similarly, he considered that mining tax revenues represent an important source of tax revenue and extraordinary growth is projected.

"For the next five-year period, the Government expects to go from 0.9% of GDP in tax revenues to 1.5% of GDP. To achieve this, it must be borne in mind that in order to make this leap, investment is required for the next few years and for this reason we need a good context", said David Tuesta.

Newsletter PERUMIN 35

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