Peru Mining Report

Published 24 June 2015

  • 84 pages
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$1,295.00
Peru Mining Report

BMI View: Peru's mining sector growth will be driven by both a strong project pipeline, by both domestic and international firms, encouraged by the country's strong investment and regulatory framework for miners. However, increasing public protests regarding Peru's mining sector will delay new projects from coming online.

Peru's mining sector should see further growth over the next five years on account of its significant untapped reserves and open investment framework. Peru will still remain a significant global producer of several base and precious metals, and we expect continued diversification as miners explore and develop new deposits. Copper projects accounting for the largest proportion of new mine projects and expansions. The Peruvian government estimates that the country's current mining projects pipeline totals over USD75bn. The sector is dominated by global copper mining majors including Southern Copper (a division of Grupo Mexico), Freeport McMoRan and Glencore Xstrata, which are boosting output by both expanding existing operations and undertaking new investment projects.

Continued friction between the public and mining corporations, concerning the environmental and social impact of the mining industry, will delay new projects from coming online. The Peruvian government estimates that the country's current mining projects pipeline totals over USD75bn, meaning that continued unrest will have considerable effects within the country. Nevertheless, Peru will remain a significant global producer of several base and precious metals, and we forecast the value of Peru's mining industry will grow from USD23.2bn in 2015 to 27.2bn in 2019. This would represent average growth of 3.4% year-on-year (y-o-y) over 2015-2019, significantly slower than 14.9% y-o-y over 2010-2014.

Modest Growth Ahead
Peru - Mining Industry Value (USDbn) & Growth y-o-y (%)
e/f = BMI estimate/forecast. Source: National Sources, BMI

Policy Moderation To Accommodate Miners

Table of Contents

BMI Industry View
7
SWOT
11
Industry Forecast
13
Copper: Accelerating Output, But Risks To Downside
13
Positive Multi-Year Trend
14
Table: Peru - Select Copper Projects
15
Downside Risks Dominate
15
Table: Copper Production Forecast (Peru 2011-2019)
16
Gold: Further Declines Before Rebound
16
Several Firms To Dominate Industry
17
Risks To Downside
18
Table: Gold Production Forecast (Peru 2011-2019)
19
Lead: Subdued Outlook
20
Table: Lead Production Forecast (Peru 2011-2019)
21
Silver: Peruvian Production To Remain In Second
22
Table: Peru - Key Silver Projects
23
Risks Slated To Downside
23
Table: Silver Production (Peru 2011-2019)
24
Tin: Increasing Output From Minsur Investment
24
Multi-Year Price Gains To Encourage Minsur Production
25
Table: Tin Production Forecast (Peru 2011-2019)
26
Zinc: Peru To Lead In Americas Zinc Production
26
Table: Peru - Key Zinc Projects
27
Table: Zinc Production Forecast (Peru 2011-2019)
27
Industry Risk Reward Ratings
28
Peru Risk/Reward Index
28
Rewards
28
Industry Rewards
28
Country Rewards
28
Risks
29
Industry Risks
29
Country Risks
29
Table: Mining Industry Forecasts (Peru, 2013-2019)
30
Americas Risk Reward Index
30
Regional Risks Increase Modestly
30
Weak Prices To Hurt, While Stronger Dollar A Mixed Blessing
31
Regional Outlook Unchanged Despite Some Reordering
32
Table: Americas - Mining Risk/Reward Index
33
Regulatory Development
34
Recent Developments
34
Further Tension Between Miners & Local Communities
34
Open Investment Framework
34
Improving Tax Regime
35
Continued Corruption
36
Table: Peru - Political Overview
36
Table: Regional Regulatory Index
38
Commodities Forecast
39
Commodity Strategy
39
Ferrous Metals
39
Non-Ferrous Metals
43
Aluminium: Abating Tightness To Cap Prices
43
Copper: Continued Weakness Ahead
44
Lead: Prices To Firm As Year Progresses
45
Nickel: Prices Will Only Rise Gradually
46
Tin: Waiting On A Deficit
47
Zinc: Modest Price Growth On Tighter Supply But Looser Demand
48
Table: Select Commodities - Performance & BMI Forecasts
50
Competitive Landscape
51
Table: Financial Data - Key Mining Firms Listed In Peru
51
Gold & Silver Prospects Face Headwinds
52
Company Profile
53
Buenaventura
53
Latest Results
55
Table: Buenaventura - Key Financial Data
55
Global Company Strategy - Glencore Xstrata - Q2 2015
56
Company Overview
57
Latest Financial Results
57
Company Strategy
58
Table: Glencore Xstrata - Supply Chain Analysis
60
Table: Glencore Xstrata - Key Financial Data
61
Global Company Strategy - Grupo M-xico - Q1 2015
62
Company Overview
63
Company Strategy
63
Latest Results
64
Table: Grupo M-xico - Key Financial Data
64
Address Details
65
First Quantum
66
Latest Results
69
Table: First Quantum: Key Financial Data
70
Regional Overview
71
Americas Risk Reward Index
71
Regional Risks Increase Modestly
71
Weak Prices To Hurt, While Stronger Dollar A Mixed Blessing
72
Regional Outlook Unchanged Despite Some Reordering
73
Table: Americas - Mining Risk/Reward Index
74
Global Industry Overview
75
Global Overview
75
2
78
3
79
5
83
Methodology
85
Industry Forecast Methodology
85
Sources
86
Risk/Reward Index Methodology
87
Table: Weighting Of Indicators
88

The Peru Mining Report has been researched at source and features BMI Research's mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's Peru Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in Peru.

Key Benefits

  • Use BMI's independent industry forecasts on Peru to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in Peru's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Peru.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI’s key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Industry SWOT analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

  • Mining industry: Industry size (USDmn), real growth (%), % of GDP, employment (‘000), workforce as % of total workforce, average wage (USD).
  • Output: Production volumes (‘000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (USDmn) for all major metals, minerals, ores and gems mined in each state.
  • Commodity markets: Global demand, supply, stocks and benchmark prices (USD) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI’s Mining Risk Reward Index

BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing USD sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Mining reports are based on an extensive network of primary sources, such as multilateral organisations (UN, WB, IMF), national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc