Peru will become the world’s second-largest copper miner, behind neighboring Chile, due to $20 billion in Chinese investments in copper mining projects. CCTV America’s Dan Collyns reported this story from Peru.
MMG Limited, a subsidiary of China Minmetals Corporation, has recently acquired the Las Bambas copper mine. The $7-billion sale means Chinese backers are behind one-third of all of Peru’s new mining investments by value.
Another Chinese mining investment is Chinalco’s $4.8 billion Toromocho copper mine. It started production in December 2013 with expectations of boosting Peru’s copper output.
After a batch of disappointing growth figures, Peru is betting heavily on China’s massive investment in new copper mines to revitalize its mineral export-based economy.
Weak mining activity has dragged down Peru’s economic growth rate this year to its slowest pace since 2009. Earlier this week, Peru’s economy ministry cut its view of this year’s official economic growth from 5.5 percent to just over 4 percent.
But growth is expected to improve as officials predict Peru will add more than a million tons of copper to its production by 2016, making it the world’s second largest producer.
However, some analysts worried Peru could become overly reliant on Chinese investment.
“Because the copper market is dominated by China it will not only make us increasingly primary export and therefore more dependent on mineral exports, in general terms, but more dependent on China in more specific terms and, therefore, increasingly exposed to the volatile nature of these markets,” said Carlos Monge, the Latin American coordinator at the Revenue Watch Institute.
Local conflicts over land and water rights can make mining investment in Peru a tricky business. Three years ago, local protests halted the $5 billion Minas Conga gold mining project over water supply concerns.