Peru - Country Commercial Guide
Mining Equipment and Machinery

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2020-10-11

Overview

Peru is a very diverse country due to its geography and climates.  Abundant mineral resources susch as copper, gold, silver and lithium are found mainly in the mountains.  It is the world’s second largest producer of copper and silver and Latin America’s largest producer of gold. Peru’s mining industry has been an essential component of the country’s economic development. Substantial investment has been directed to the sector over the past 20 years. The mining industry accounts for 10 percent of Peru’s gross domestic product and 60 percent of its exports which make it Peru’s top export sector.

As expected, the mining sector was highly affected due to this crisis. After the GOP closed operations in March due to the COVID-19 pandemic, large-scale open-pit operations and construction projects of national interest restarted in May 2020. In August, the GOP reactivated of all mining activities. According to the Institute of Mining Engineers of Peru, the sector will close this year with a loss of US $ 5 billion.

GOP figures show approximately 200 operating mines and a number of major projects  waiting to be developed. According to Energy and Mines Ministry, Peru has 48 mining projects under development (seven are in their first years of construction and the rest will start in the perioid 2020-2025) worth a total of $57.7 billion in investment. Of the new mining investments expected to be developed, $40.9 billion will be allocated to copper projects, or 71 percent of the total. The United Kingdom is the largest foreign investor in Peru, followed by China, Canada and Mexico. The project portfolio investments have 11 countries:

 

Country

Number of Projects and Most Relevant Projects

Approx. Investment

UK

6 projects including Quellaveco (owned by Anglo American)

US$ 12 billion

China

5 projects including Ampliacion Toromocho (Chinalco, owned by Chalco)

US$ 10.1 billion

Canada

11 projects

US$ 8.4 billion

Mexico

4 projects

US$ 7.7

US

4 projects including Ampliacion Bayovar (Miski Mayo, owned by The Mosaic Company), Quecher Main and Yanacocha Sulfuros (Yanacocha, owned by Newmont)

US$ 7.5 billion

Peru

7 projects including Mina Justa (owned by Grupo Breca)

US$ 4.5 billion

Australia

2 projects

US$ 3 billion

Brasil

5 projects

US$ 1.6

Japan, Switzerland, Corea

4 projects

US$ 2.2 billion

TOTAL

48 Projects

US$ 57 billion

In addition to the U.S. investments noted above, U.S.-based Freeport McMoRan has a concession for Cerro Verde, a large copper mine in the south of Peru (Arequipa), that completed a $5.5 billion expansion in 2016.

Opportunities

The COVID-19 pandemic and associated drop in mineral prices, as well as political instability, social conflicts and excessive bureaucracy have negatively impacted the sector in 2020. Nevertheless, Peru remains an attractive destination for mining investments, with large mineral and metal reserves, including major undiscovered deposits. Peru offers mining investors significant commercial advantages and ample freedom to import machinery, equipment, and services that they require for their mining activities at a lower cost and with less bureaucratic requirements than many other countries. Peruvian laws, regulations, and practices do not discriminate between national and foreign companies. The GOP guarantees foreign investors legal stability on income tax regulations and dividend distributions. A favorable legal framework, readily available cadastral and geological information, and a stable economy have motivated foreign investment from the United States, Canada, the U.K., Australia, Mexico, Brazil, and China.

We recommend that U.S. exporters of capital goods and potential investors entering the Peruvian market establish a local branch office or appoint a local representative and legal counsel knowledgeable of the Peruvian market, mining sector legal framework, and Spanish language. If U.S. exporters of smaller goods prefer to work with local distributors, they should clarify the expertise and track records of those companies with whom they choose to work. When selling mining equipment to Peru, it is important to offer post-sale services. Mining companies require assembly, maintenance, parts, and operational training.

2018 Import Market Share (% for U.S. and major competitors): US 28.07; China 16.03; Brazil 12.22; Germany 6.68; Japan 4.32.

 

2016

2017

2018

2019

Total Local Production

n/a

n/a

n/a

n/a

Total Exports

133.1

184.2

199

196.9

Total Imports

2,169.9

2,091.5

2,295.9

2,501.1

Imports from the US

626.2

524.4

569.6

702

Total Market Size

2,036.8

1907.3

2,096.9

2,304.2

Exchange Rates

3.38

3.26

3.29

3.40

Units: $ millions

Total Market Size = (Total Local Production + Imports) - Exports

Source: Global Trade Atlas

Leading Sub-Sectors

HTS Code

Description

%

847490

Parts of Mach For Sorting Etc. Earth Stone Ores Etc.

8.3

842952

Mech Shovels Excavators Etc. W 360 Degree Sprstruc

8.0

870423

Truck, Diesel Eng, Gvw > 20 Metric Tons

6.8

842951

Mech Front-End Shovel Loaders, Self-Propelled

5.8

843149

Parts And Attachments Nesoi For Derricks Etc.

5.0

840999

Spark-Ignition Reciprocating Int Com Pistn Eng Pts

4.2

842199

Filter/Purify Machine & Apparatus Parts

3.3

842959

Mech Shovels, Excavators And Shovel Loaders Nesoi

3.1

841480

Air/Gas Pumps, Compressors And Fans Etc, Nesoi

2.9

842911

Bulldozers And Angeldozers, Self-Prop, Track Lay

2.9

870410

Dumpers Designed For Off-Highway Use

2.8

Key Industry Events

MINExpo International, September 2021

Las Vegas, NV

Perumin, 35th Mining Convention, September 2021

Cerro Juli, Arequipa

Organizer: Institute of Mining Engineers of Peru (IIMP)

Expomina Peru 2021, April 2021

Jockey Exhibitions Center, Lima

Organizer: Grupo DIGAMMA

Web Resources

Sociedad Nacional de Minería, Petróleo y Energía - SNMPE

(National Mining, Oil, and Energy Society)

Francisco Graña 671, Magdalena del Mar. Lima 17

Tel.: (511) 215-9250

Ministry of Energy and Mines (limited English content)

Av. Las Artes 260, San Borja. Lima 41

Tel.: (511) 411-1100

Instituto de Ingenieros de Minas del Peru - IIMP (Spanish)

Calle Los Canarios155, La Molina. Lima 12

Tel: (511) 313-4160

Energy and Mining Regulatory Agency – Osinergmin (Spanish)

(Supervising Agency for Investment in Energy and Mining)

Jr. Bernardo Monteagudo 222, Magdalena del Mar. Lima 17

Tel.: (511) 219-3410

Environmental Assessment and Control Agency - OEFA (Spanish)