Peru Mining Report

Providing expert analysis, independent forecasts and competitive intelligence on the mining.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Petrochemicals Risk Reward Index, Economic Forecasts, Company Profiles and Global, Regional and Country Industry Overviews.

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Peru Mining Report
Product Price
$1,295.00

BMI View: Peru's mining industry will ramp up in terms of value and production growth , despite low mineral prices during 2016-2019. C ompetitive operating costs and a stable business environment will support a strong project pipeline.

Peru Mining Industry Value Forecast (2013-2019)
2013 2014e 2015f 2016f 2017f 2018f 2019f
Note: See industry forecasts for specific commodity growth forecasts. e/f = BMI estimate/forecast. Source: National sources, BMI
Mining Industry Value, USDbn 23.38 21.49 20.28 20.06 20.85 22.14 23.53
Mining Industry Value, USDbn, % y-o-y -8.07 -8.09 -5.62 -1.07 3.93 6.16 6.28

Latest Updates & Structural Trends

  • Peru's extractive industry will experience significant growth over our forecast period to 2019. We expect the sector's value to climb from USD20.1bn in 2016 to USD23.5bn by 2019, averaging 3.8% annual growth. This rate represents a significant improvement from the 5.1% annual decline over 2012-2015. In particular, we expect copper and gold to outperform in terms of production growth due to strong project pipelines and continued investment. Silver and tin will also benefit from a number of key projects, while lead and zinc output posts slower growth. The country will remain a top global producer of each of these metals.

  • Copper projects account 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. Increasing Chinese investment and mining activity will stem from MMG and Chinalco.

  • Ongoing metal price weakness, anti-mining protests, and illegal mining will remain key challenges to Peru's mining industry. While these factors may result in project delays, Peru's low operating costs, supportive political environment and significant project pipeline will offset any production declines.

  • Peru's mining sector will be supported by the country's vast mineral reserves, open investment framework, and low operating costs. Peru will remain competitive relative to other Americas mining jurisdictions and we expect mining firms will continue to invest in the country. While the country's overall tax levels are relatively higher than its regional peers, miners in Chile still face elevated labour, electricity and water costs compared to Peru. Moreover, the business environments for mining firms in Argentina and Bolivia remain poor, while Brazil's regulatory and investment frameworks remain complex and hinder foreign investment.

BMI Industry View
7
SWOT
10
Industry Forecast
12
Copper: Solid Growth, But Risks To Downside
12
Landscape To Support Growth
14
Table: Peru - Select Copper Projects
15
Downside Risks Dominate
17
Table: Copper Production Forecast (Peru 2014-2019)
18
Gold: Growth To Rebound By 2017
18
Hochschild and Buenaventura To Dominate Sector
19
Risks To Downside
21
Table: Gold Production Forecast (Peru 2014-2019)
22
Lead: Growth To Be Modest
23
Table: Lead Production Forecast (Peru 2014-2019)
24
Silver: To Remain Second-Largest Producer In The Americas
25
Table: Peru - Key Silver Projects
26
Risks Slated To Downside
27
Table: Silver Production (Peru 2014-2019)
27
Tin: Minsur To Drive Growth
27
Minsur To Drive Investment
28
Table: Tin Production Forecast (Peru 2014-2019)
29
Zinc: To Lead Production Amongst Regional Peers
29
Table: Peru - Key Zinc Projects
31
Table: Zinc Production Forecast (Peru 2014-2019)
31
Industry Risk Reward Ratings
32
Peru Risk/Reward Index
32
Rewards
32
Industry Rewards
32
Country Rewards
32
Risks
32
Industry Risks
32
Country Risks
33
Americas Risk Reward Index
33
Risks To Increase Modestly
33
Latest Revisions:
34
Table: Americas - Mining Risk/Reward Index
36
Regulatory Development
37
Recent Developments
37
Further Tension Between Miners & Local Communities
37
Open Investment Framework
37
Trade & Investment Risk Analysis
38
Commodities Forecast
41
Global - Metals: Lower Costs And Weak Demand To Anchor Prices
41
Metal Price Weakness: Chinese Equity Slump & US Dollar Strength
42
US Dollar Strength To Anchor Weak Metal Prices
43
Competitive Landscape
45
Table: Financial Data - Key Mining Firms Listed In Peru
45
Gold & Silver Sector To Face Headwinds
46
Company Profile
47
Buenaventura
47
Latest Results
48
Table: Buenaventura - Key Financial Data
49
First Quantum - Q4 2015
50
Latest Results
53
Table: First Quantum: Key Financial Data
53
Global Company Strategy - Grupo M-xico - Q415
55
Table: Grupo M-xico - Key Financial Data
57
Regional Overview
58
Americas Mining: The Three Key Themes
58
Key Themes:
58
Regulatory Changes On The Cards
58
Dollar Strength And Oil Price Weakness To Support Production
59
Americas To Outperform Northern Peers
60
Global Industry Overview
62
Global Mining: 2015 Key Themes Revisited
62
Table: Key Mining Themes For 2015
62
Theme: Mining Capital Expenditure Will Continue To Decline
62
Theme: US Dollar Strength
63
Iron Ore Consolidation & Majors Share To Increase
64
Asian Investment In Africa To Continue
65
2015's Standouts
66
Methodology
68
Industry Forecast Methodology
68
Sources
69
Risk/Reward Index Methodology
70
Table: Weighting Of Indicators
71

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.