In the midst of a presidential election, Peru mining sector reports mixed results

As Peru goes through yet another presidential election, with 18 candidates running, six likely making it to June’s second round and no defined favorite, the Ministry of Energy and Mines (Minem) made public its most recent dataset, which shows that copper production rose by 0.7% in February compared to the same month last year.

According to the report, Peru produced 170,989 tonnes of copper in the second month of the year, which is more than what was produced during the same period last year, but which represents a 3.1% fall compared to January.

The improved year-on-year performance was led by Antamina, which is owned by BHP (NYSE: BHP; LSE: BHP), Glencore (LSE: GLEN), Teck Resources (TSX: TCK.B; NYSE: TCK) and Mitsubishi and was responsible for 22% of the production; Aluminum Corp. of China’s Chinalco Peru, with 12.4% of the production; and Glencore’s Compañía Minera Antapaccay, with 0.4%.

Copper makes up for 4% of the South American country’s GDP. By year-end, Minem expects annual copper production will reach 2.5 million tonnes, which would mark a 16% increase compared to 2020.

Exports of copper grew by 21% year-on-year in the month of January. But the red metal wasn’t even close to being the best performer. Iron ore exports shot up by 132.4%, molybdenum by 76.4%, lead by 58%, and silver by 49.7%.

Overall, mining exports filled Peru’s coffers with US$2.5 billion in January, an 8% year-on-year increase. 

Gold, on the other hand, fell both in exports and production. Exports dropped by 14.2% year-on-year in January, while production in February was down 25.5% year-on-year.  

According to the ministry, lower production rates were the consequence of lower grades at Minera Yanacocha; Covid-19-related restrictions for Minera Poderosa’s personnel, and lower volumes for Minera Aurífera Retamas. Together, these three companies are responsible for over 25% of Peru’s total gold production.