Peru’s mining sector experienced a mix of challenges and opportunities in April 2024, with varying production outcomes across different metals and notable economic trends. This report provides a comprehensive look at the industry’s performance, highlighting key metals, economic indicators, and market dynamics.
Production and Prices
Copper
- Production: 204,000 metric tons
- 8% decrease compared to April 2023
- 7% decrease compared to March 2024
- Price: $4.29/lb, up 9% from the previous month
The decline in copper production was primarily due to lower output from major mines including Antamina (9,300 tons less), Antapaccay (6,500 tons less), Marcobre (5,900 tons less), Las Bambas (2,200 tons less), and Cerro Verde (1,900 tons less). The price increase was attributed to reduced inventories in the London Metal Exchange, fears of lower supply due to maintenance at some Chinese smelters, and signs of recovering Chinese demand.
Gold
- Production: 8 metric tons
- 11% increase compared to April 2023
- 1% decrease compared to March 2024
- Price: $2,334/oz, up 8% from the previous month
The increase in gold production was mainly due to higher volumes reported by Boroo (0.4 tons more), Yanacocha (0.2 tons more), and Poderosa (0.1 tons more). These companies contributed about 30% of the total production for the month. The price increase was driven by higher demand as a safe-haven asset amid geopolitical tensions in the Middle East.
Silver
- Production: 255 metric tons
- 3% increase compared to April 2023
- 10% increase compared to March 2024
- Price: $27/oz, up 12% from the previous month
The higher production in April was due to increased volumes from Buenaventura (12 tons more) and Chinalco (11 tons more), among others. These increases more than offset the lower production from Volcan (11,000 tons less) and Antamina (9,000 tons less). Buenaventura’s significant contribution was due to the exploitation of its Yumpag project, which received its operating permit on March 17.
Zinc
- Production: 92,000 metric tons
- 30% decrease compared to April 2023
- 9% decrease compared to March 2024
- Price: $1.23/lb, up 10% from the previous month
The lower volume extracted in April was a result of decreased production from Antamina (32,000 tons less) and Volcan (8,000 tons less), the two largest zinc producers that contributed 28% of the total extracted in the month. The price increase was due to low supply amid lower production from some mines worldwide and maintenance at smelters in China.
Other Metals
| Metal | Production | Year-over-Year Change | Price |
|---|---|---|---|
| Lead | 23,000 metric tons | 2% decrease | $0.96/lb, up 4% from previous month |
| Iron | 1,032,000 metric tons | 8% increase | $113/ton, up 3% from previous month |
| Tin | 2,675 metric tons | 14% increase | $14/lb, up 15% from previous month |
| Molybdenum | 3,530 metric tons | 37% increase | $20.06/lb, up 0.4% from previous month |
Economic Indicators
Mining GDP
- 5% decrease in April 2024 compared to April 2023
- Main factors: Lower copper and zinc production
The contraction of metallic mining activity in April was due to lower treated tonnage, understood by the temporary suspension (two days) of operations at the Antamina plant for maintenance, as well as the suspension of operations at 3 Volcan mining units to adapt operating permits, which resumed on April 17.
Investments
- April 2024: $327 million
- 5% decrease compared to April 2023
- 5% decrease compared to March 2024
- January-April 2024: $1,322 million, 11% increase year-over-year
The monthly decrease is explained by lower levels of investment in infrastructure ($21 million less) and development and preparation ($18 million less). The companies that reported the highest investment were Antamina ($45 million), Buenaventura ($28 million), and Chinalco ($27 million), which together contributed 30% of the total investment for the month.
Exports
- April 2024: $3,328 million, 11% decrease compared to April 2023
- January-April 2024: $13,624 million, 3% increase year-over-year
The monthly decrease is mainly explained by the lower value of copper shipments ($502 million less), zinc ($82 million less), and lead ($54 million less). This was due to lower exported volumes of the three metals, with lead also affected by price decline. The cumulative growth for the first four months is primarily due to the higher value of gold shipments ($1,161 million more) and tin ($96 million more), which were attenuated by the lower export value of copper ($348 million less) and zinc ($278 million less).
Key Trends and Observations
- Mixed production results across different metals, with significant decreases in copper and zinc, but increases in gold, silver, and other metals.
- Generally positive price trends for most metals, driven by various global factors including geopolitical tensions and supply concerns.
- Overall decline in mining GDP, reflecting challenges in the sector, particularly in copper and zinc production.
- Resilience in export values, with the increase in gold exports offsetting decreases in other metals.
- Ongoing impact of operational challenges, including temporary suspensions and maintenance activities at key mining sites.
- Increasing importance of gold in Peru’s mining export portfolio, now representing 32% of mining exports in the first four months of 2024.
- Continued influence of global market dynamics, including Chinese demand and supply chain issues, on Peru’s mining sector performance.
Conclusion
As Peru navigates these complex trends, the ability of mining companies to adapt to operational challenges and market fluctuations will be crucial for the sector’s future performance and its contribution to the national economy. The resilience shown in export values, despite production challenges, highlights the sector’s importance and adaptability. However, addressing the factors leading to decreased production in key metals like copper and zinc will be essential for maintaining Peru’s position in the global mining industry.
Original Report: https://www.snmpe.org.pe/informes-y-publicaciones/boletin-estadistico-mensual/mineria/8640-boletin-estadistico-mensual-minero-abril-2024.html
