Peru Wants to Unlock a Copper Boom. Permits Are in the Way.

SEATTLE (Scrap Monster): Peru, the world's third-largest copper producer, is betting that it needs faster permits instead of new mines to unlock the copper growth it's been after for years.

The Peruvian government announced that it wants annual output up by 1 million metric tons within five to six years and the most obvious thing happened: Chinese and U.S. companies came back for stalled projects.

WHAT HAPPENED

Lima is wasting no time. Its energy and mines ministry has already identified 27 permits that can be cut from the roughly 100 that are required today. But President Keiko Fujimori's administration has assured that cutting approval delays will happen without compromising on environmental standards. It's a good reminder as the government tries to reverse copper output that's been essentially flat for years.

Peru's copper output is expected to hold between 2.5 million and 2.7 million tons this year, roughly unchanged from 2023, due to declining ore grades and recurring social conflicts around mine sites.

WHY IT MATTERS

But here's the thing: There is already a big backlog of mining projects Lima needs to address. Copper accounts for about 70% of Peru's $64 billion mining project backlog.

Yet most of the roughly $7 billion in mining investment expected this year is going toward sustaining existing operations rather than adding new mines. Which means the pipeline remains stagnant.

In the two months since the new president took office, roughly 20 mining companies, mostly Chinese and American, have met with the ministry to discuss reviving delayed projects.

The overhaul of permits is only one test of whether Peru can turn a deep project pipeline into actual output. Copper demand is rising globally on electrification and data-center buildout, and yet the world's third-largest producer has been stuck for three years despite sitting on one of the largest project backlogs in the industry.

WHAT'S NEXT

What's next is an update on the U.S.-Peru critical minerals cooperation agreement signed in February this year. Secretary of State Marco Rubio highlighted the partnership during a visit to Peru this month. Chinese firms remain among the most active dealmakers on the ground, so one can dream.

Courtesy: www.finance.yahoo.com