Carlos Lobatón Lira, Partner and Country Manager Vantaz Perú
In a country with such a deep mining tradition as Peru, the results of the study "Mining Signals", conducted by Vantaz Group, CESCO and Rumbo Minero América Mining (Digamma Group), fill us with deep concern and call us to reflection and action.
May 31st, 2022
The Global Index reveals that expectations are in pessimistic territory, with a level of 31.1 points, a dramatic deterioration compared to the situation of a year ago, when the outlook of industry players was clearly positive (58.7 points).
What explains this negativism in such a key industry for our country? In the first place, 78% of those consulted in the study say that the economic situation is unfavorable, but - and this is a fundamental factor in the pessimism - an overwhelming 94% say that the social situation is also unfavorable. Although in the regulatory and environmental areas there is less critical perception (67% and 51% respectively), expectations are nevertheless in negative territory.
It is clear that the social situation is the aspect that worries the industry the most. A total of 63% of those consulted believe that problems with communities in the areas of influence of mining companies, such as road blockades, are an incremental risk for the continuity of operations of companies in the sector in the country. The report informs us that in general, the senior executive segments tend to be more pessimistic than middle management, with the exception of perspectives related to the social environment, where the latter have a much more negative perception: 100% of those surveyed believe that the social situation is currently unfavorable for the mining activity.
Despite the negative environment, the Peruvian mining sector continues to have good fundamentals to boost its growth: almost all of those surveyed expect the price of copper to remain stable or increase in the next 3 to 24 months, as well as the demand and production of the red metal.
With all these elements on the table, what to do then? The study sheds light on the matter. Among the most frequently mentioned suggestions are "strengthening the country's public institutions" and "increasing the competitiveness of the industry". Both challenges are closely related, because as long as we do not have good institutions that do not voluntarily change the rules of the game and that operate professionally, it will be very difficult to increase the productivity of the Peruvian mining industry.
But this is a challenge not only for mining, but also for the country. And it is not an issue of a particular political color, but rather it is a cross-cutting issue. If we want Peru to do well, to have a dynamic economy that allows the progress of families and individuals throughout the country, that makes it possible for more households to escape poverty, for our sons and daughters to be educated and achieve the life they desire, we must have a dynamic, productive, modern, socially and environmentally responsible mining industry that is an ally of development. And this can be achieved with a stable, professional and modern institutional framework.
Decoding the environment
In the Vantaz Research Department we have a wide range of services, led by specialists in market research, which make visible insights and data, which allows our customers to make informed decisions, considering demand information, pricing, and other information, benchmarks and trends in the local and international mining sector.
In the last 10 years we have conducted more than 50 studies for the areas of supply, projects, people, environment and sustainability, among others. In addition, we have important alliances to develop studies that contribute to the mining community such as "Signs of Mining", "Women in Mining" and the "Collective Negotiations" report.
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