Mineral industry of Peru

The mineral industry of Peru has played an important role in the nation's history and been integral to the country's economic growth for several decades.^[1] The industry has also contributed to environmental degradation and environmental injustice;^[2] and is a source of environmental conflicts that shape public debate on good governance and development.^[1]

In 2019, the country was the 2nd largest world producer of copper,^[3] silver,^[4] and zinc;^[5] 3rd for lead,^[6] 4th of tin and molybdenum;^[7][8] 5th for boron;^[9] and 8th largest global producer of gold.^[10]

In 2006, Peru occupied a leading position in the global production of the following mineral commodities: fourth in arsenic trioxide, third in bismuth, third in copper, fifth in gold, fourth in lead, fourth in molybdenum, fourth in rhenium, first in silver, third in tin, and third in zinc. In Latin America, Peru was the first ranked producer of, in order of value, gold, silver, zinc, lead, tin, and tellurium and the second ranked producer of copper, molybdenum, and bismuth.^[11][12]

In 2006, Peru's economy benefited from high prices for mineral commodities. To date, the Government has privatized 220 state-owned firms via joint ventures and consortia in the mining and fuels industries. The firms have generated $9.2 billion, with an additional committed capital flow of about $11.4 billion, representing 17% and 21% of Peru's GDP, respectively. Privatizations and concessions generated a committed investment of $6.9 billion (2006–2010) by mining companies such as Perú Copper Inc., Toromocho copper project ($2.5 billion), Xstrata plc. for Las Bambas copper mine ($1 billion), Phelps Dodge for expansion of Cerro Verde copper mine ($850 million), Monterrico Metals Inc. for Rio Blanco base metals project ($800 million), Rio Tinto Limited for La Granja copper project ($700 million), Southern Copper Corporation for expansion of Ilo smelter ($400 million), Goldfields Ltd. for Cerro Corona copper-gold project ($350 million), and Companhia Vale do Rio Doce for the Bayovar phosphate project ($300 million). The Ministerio de Energía y Minas reported that of the committed investment in 2006, Peru received $1 billion for gas and $200 million for petroleum.^[11]

Petróleos del Perú (PETROPERU S.A.) was created on July 24, 1969 (law No.17753) as a state-owned entity, dedicated sequentially to transportation, refining, and commercialization of refined products and other derivatives of petroleum. On June 2, 2004, the Peruvian Congress (law No.28244) excluded PETROPERU S.A. from the privatization process and authorized its participation in the exploration and production of hydrocarbons. The state agency Perupetro S.A. was created on November 18, 1993 (law No. 26221) to promote investments for hydrocarbon exploration and production in the country. Perupetro negotiates, signs, and administers hydrocarbon contracts, for which PETROPERU must compete with private firms as well. In 2006, PETROPERU invested $4.5 billion in the hydrocarbon sector.^[11]

The mineral industry in Peru has also generated controversy. While the mineral industry has spurred national economic growth, it has also produced changes to the environment that compromise rural populations' livelihoods.^[13] As a result, there has been a rise in corporate-community conflict between extractive corporations and rural populations, primarily in the form of peasant protests.^[14]