Informal Mining Boom Poses Major Risk for Peru’s Copper Investors

Informal Mining Challenge Hampers Peru’s Copper Expansion

Peru’s copper sector faces a critical threat from rising informal mining, warns SNMPE President Julia Torreblanca. Despite Peru aiming to reach a record 3.4 million metric tons of copper by 2030, illegal operations are encroaching on mining concessions. This trend jeopardizes security and investment, impacting major players like Southern Copper Corp. and First Quantum Minerals Ltd. The growth of informal mining risks undermining Peru’s position as a leading copper producer.

How Informal Mining Threatens Peru’s Copper Industry and Investments

The informal mining surge conflicts with formal concession holders, increasing risks of criminal activity and legal disputes. Though informal copper output remains low compared to formal production, it grows steadily, driven by high copper prices. Peru’s temporary registry system, Reinfo, intended to facilitate formalization, faces criticism for enabling illegal mining under the guise of legality. Additionally, the new MAPE Law proposal could inadvertently legitimize informal operations, further complicating regulation efforts.

Regulatory and Security Issues Define Peru’s Copper Sector Outlook

Peru’s government struggles to balance mining sector growth with controlling informal miners, many of whom operate without mineral rights. This challenge stifles investment due to regulatory uncertainty and security concerns. Industry leaders call for stricter enforcement and legislative clarity to protect both investor interests and Peru’s copper output goals. Without addressing informal mining effectively, Peru risks losing investor confidence and falling behind in global copper production.

SuperMetalPrice Commentary:

Informal mining presents a growing strategic threat to Peru’s copper industry, risking billions in foreign investment. Market participants should watch regulatory developments, particularly the MAPE Law, which may shift formalization dynamics. Strengthening enforcement and transparency will be key to securing Peru’s copper production growth.