MINING SECTOR IN PERU: THE

ROLE OF CANADIAN

INVESTMENT

Alan Fairlie Reinoso

Trade

Saldo Comercial Perú-Canadá, 2008-2012 (US$ Millones)

Fuente: SUNAT

Elaboración: MINCETUR-OGEE-OEEI

1 925,3

2 311,0

3 329,4

4 231,7

3 358,6

434,3 409,1539,6 586,2 588,4

1 491,0

1 902,0

2 789,8

3 645,5

2 770,2

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

2008 2009 2010 2011 2012

Exportaciones Importaciones Saldo Comercial

• Peru and Canada today have important links as the Free Trade Agreement (FTA) and

the Asia Pacific Cooperation.

• Canada is the fourth largest trading partner of Peru. There is a favorable trade

balance for Peru. In the period 2006-2012, trade between the two countries has tripled.

Peru-Canada Trade Balance, 2008-2012 (US$ millions)

Exportaciones Perú-Canadá, 2008-2012 (US$ Millones)

Fuente: SUNAT

Elaboración: MINCETUR-OGEE-OEEI

1 873,82 252,6

3 260,4

4 135,6

3 254,751,5

58,4

69,0

96,1

103,9

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

2008 2009 2010 2011 2012

Expo. Tradicionales Expo. No Tradicionales

• In the period 2006-2012 the bilateral trade had a significant increase in

percentage of 21%, exports to Canada accounted for 9.2% of Peru's total exports.

• However, over 95% of exports are traditional.

Exports Peru-Canadá, 2008-2012( US$ millions)

• Were exported in 2011, 28 subheadings which correspond to Traditional

Products and 776 Non-Traditional Product subheadings.

• The main products exported are mineral products, gold, lead, silver and gasoline.

• Other products are: coffee, tangerines, grapes, avocados, mangoes and fish.

• High degree of trade complementarity. The main products imported from Canada

are raw materials and intermediates. Stresses the import of wheat.

Exports Perú-Canadá, 2011(US$ millions FOB)

Traditional products Nontraditional products

Investment

• According to the commercial area of the Canadian Embassy in late 2010 Canadian

direct investment in Peru totaled nearly 4,200 million.

• While according PROINVERSION, the Canadian capital stock in Peru is

1.32494 billion dollars by 2012, as the figures underestimate.

Stock of direct foreign investment in Peru FDI stock structure of Canada in Peru by

(US$millions) sector (2010)

Peru is the third destination for Canadian investment in Latin America.

Investment in Canada as a country of residence

Canadian investment as matrix house

• Canadian investments are modeled on public-private partnerships (PPPs).

• While investment focuses on finance and mining sectors also registered

Proinversión investments in the services, trade, industrial, construction and oil.

• According to the Commercial Section of the Embassy of Canada, Canadian

companies are also investing in oil, energy, telecommunications, finance, agriculture

and sanitation.

• There are a considerable number of Canadian companies that provide services in

areas such as engineering, mapping, geophysics and community relations.

• Among the major mining investments stands Scotia Group (financial sector) and

SNC Lavalin Peru (infrastructure).

• Major investors made capital movements, through contributions or acquire shares

in the period 2001-2011, are:

Mining in Peru

• Peru is a leading producer of silver and second largest copper producer.

• In Latin America is the leading producer of gold, silver, zinc, tin and lead.

Ranking of Production

The mining sector in Peru (2001-2010)

In recent years, national mineral exports have increased by 7 times its value.

Copper and gold are the major national exports.

Minig exports (millions US$ FOB) Mining exports according to

destination market - 2011

Investment in the mining industry

• According To the Ministry of Economy and Finance of Peru, Canada is the third largest

investor in the extractive industry, With The Presence of 85 mining companies and 12

companies of Canadian oil and gas.

• The Commercial Section of the Embassy of Canada Said That Canadian companies

operating there are 97, of which 87 are junior companies engaged in the exploration

and production nine minerals.

Mining investment Ranking 2012

Mining companies that stand out are: Teck Cominco, Antamina consortium partner,

Pan American Silver and Sulliden largest Shahuido: Barrick Gold Corporation.

Major Canadian mining projects in Peru

Source: Canadian Mining Investment in Latin America

Projected mining investment portfolio

Fuente: MEM(2012), Boletín minero octubre 2012.

Mining conflicts

Misquichilca Barrick: operates the Pierina (Ancash) and Lagunas Norte (La Libertad).

No pay royalties to Peru because the Security Agreements and Measures Investment

Promotion.

Another conflict was generated by the purchase of the Pierina mine, which Barrick not

make any payment to Peru. Pollution caused by Pierina.

Agreement pledged to reforest the communities affected by mining, repairing community

relations area of the company and withdraw the complaint was against the leaders of the

peasant patrols that prompted blocking mining camp.

Bear Creek: conflicts with Aymara communities by the Santa Ana project was canceled the

mining concession.

On the other hand, is responsible Corani silver mine and has obtained the consent of the

rural communities to implement the project.

Agreement: financing infrastructure and education projects.

Candente Cooper: social conflict , since the San Juan Cañaris Baptist oppose

Cañariaco mining project located in Lambayeque. Denounced to the mining company

for committing abuses and failing to respect the customary rights of the community

and is perceived as a threat to the ecosystem.

Antamina: Ango Raju commoners of the accused for breach of the promises and

contaminate the area. Cajacay residents were affected by the toxic spill in July

2012.

But...

Millpo: performs Magistral mining project, which is located in the district Conchucos,

Pallasca in Ancash province. It has developed a friendly relationship, which is based

on trust and transparency in project studies, addition to encouraging the active

participation of the people in initiatives social responsibility the company has

implemented.

Source: Defensoría del Pueblo.