Mining Boss Sees Fervor Calming With Peru Leftist to Take Office
Peru’s mining industry is hopeful of avoiding the kind of drastic measures that would stifle investment and future production when Pedro Castillo takes office in the world’s No. 2 copper producer.
While the president-elect may have spoken of taking some
extreme measures during the campaign, he may be more measured once in office,
according to Victor Gobitz, president of Peru’s Institute of Mining Engineers.
During a tense and polarizing election process, the rural
union activist from a Marxist party vowed to nationalize energy assets, block
certain projects and take a bigger share of the mineral windfall to fight
poverty. Castillo’s emergence shocked investors and stoked concern that a more
onerous operating environment would jeopardize projects needed to meet rising global
demand for copper.
But being in opposition and campaigning are different to the
responsibilities of governing and overseeing the growth needed to close
divides, Gobitz said. Castillo will also have to contend with a
center-right-dominated congress.
“The uncertainty is going to dissipate as long as there is
dialogue,” Gobitz, who also heads the Antamina mine owned by BHP Group and
Glencore Plc, said in a telephone interview Tuesday.
The stakes for metal markets are high given Peru is already
the top supplier of copper after Chile and a major producer of zinc and silver.
Its rich up-tapped deposits are also key to attaining enough copper to wire an
electrified global economy in the decades ahead.
Gobitz expects to speak with Castillo’s team in the coming
days and plans to invite the president-elect to headline a mining conference in
September. He’s banking on the new government understanding how crucial mining
is to economic and community development. Even the Tia Maria project that
Castillo opposes, may still be able to proceed once his team evaluates all the
benefits, Gobitz said.
Castillo, a teacher from the highlands with no previous
experience of national politics, takes office July 28. He’ll inherit a nation
that has suffered the world’s highest death rate from Covid as well as a deeper
economic slump than all the other major economies in the Americas. Investors
will be carefully watching his first steps, including the composition of his
cabinet.
For now, there are no signs of mining companies delaying
spending, Gobitz said. All major copper mines in the country have returned to
pre-Covid production levels, with the Mina Justa mine starting up this year and
Anglo American Plc’s Quellaveco in late-stage development, he said.
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