Chile and Peru, the world’s two largest copper producers, face the specter of stagnant output in the coming years as political uncertainty and social unrest hamper their ability to attract investment capital and launch large-scale projects.
Both countries are leading producers of the reddish-orange metal, which is vital to decarbonization efforts as a critical component of electrical equipment. The two Andean nations account for nearly 35 percent of the world’s total supply, but production has plateaued in recent years due to increased political turmoil.
Peru’s ever-changing governments and recurring protests over mining operations have hampered the country’s medium-term prospects, leading to delays in new projects and a decline in mining investment. The country is now at risk of losing its status as the world’s second-largest producer to the Democratic Republic of Congo, as output has stagnated for more than five years and industry experts complain of red tape in the licensing process.
“Mining has been the engine of the country’s economy,” Julio Velarde, the longtime governor of Peru’s central bank, said recently. “But we have been neglecting it.” The central bank estimates that mining investment will fall 16 percent in 2023 to less than USD 5 billion, and nearly 8 percent next year. These figures are considerably lower than the USD 8 billion annual investment in 2013 and 2014, raising doubts about Peru’s ability to maintain its prominent position...
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