February 2024 marked a significant improvement in Peru’s mining sector compared to the same month in 2023. Production figures for most metals showed substantial increases, with the mining GDP growing by 17%. This growth is partially attributed to a low comparative base in February 2023, when some mining operations were temporarily halted or reduced due to social protests in the country.
Production and Prices
Copper
- Production: 217,000 metric tons
- 13% increase compared to February 2023
- 6% increase compared to January 2024
- Price: $3.77/lb, down 0.5% from the previous month
The growth in copper production was mainly due to increased output from Southern (+23%), Antamina (+1%), Angloamerican Quellaveco (+41%), and Antapaccay (+219%). In February 2023, Las Bambas and Antapaccay faced operational difficulties due to protests in southern Peru. However, Cerro Verde (-7%) and Chinalco (-23%) reported lower production in February 2024. The slight price decrease was attributed to lower demand in China, particularly in its weakened real estate sector.
Gold
- Production: 9 metric tons
- 29% increase compared to February 2023
- 6% decrease compared to January 2024
- Price: $2,026/oz, down 0.4% from the previous month
The increase in gold production was due to higher volumes reported by Yanacocha (+61%), Poderosa (+15%), Baroo Misquichilca (+260%), and Antapaccay (+378%), among others. The slight price decrease was due to the appreciation of the dollar and the increase in U.S. Treasury bond yields.
Silver
- Production: 262 metric tons
- 17% increase compared to February 2023
- 4% increase compared to January 2024
- Price: $23/oz, down 1% from the previous month
The higher silver volume in February was due to increased production from Chinalco (+57%), Volcan (+18%), Nexa Perú (+57%), and Buenaventura (+204%), among others. However, Antamina (-27%) and Ares (-0.2%) reported lower production levels. The price decrease was attributed to the same factors affecting gold prices.
Zinc
- Production: 111,000 metric tons
- 1% increase compared to February 2023
- 7% increase compared to January 2024
- Price: $1.07/lb, down 6% from the previous month
The increased production was due to higher volumes reported by Volcan (+12%), Nexa Perú (+42%), and Shouxin (+141%), which offset lower production from Antamina (-41%). The price decrease was attributed to higher inventories in the London Metal Exchange, reaching the highest level since June 2021, due to the weakened global construction sector, particularly in China.
Other Metals
| Metal | Production | Year-over-Year Change | Price |
|---|---|---|---|
| Lead | 24,000 metric tons | 29% increase | $0.94/lb, down 0.4% from previous month |
| Iron | 1,184,000 metric tons | 2% decrease | $124/ton, down 8% from previous month |
| Tin | 2,577 metric tons | 18,251% increase | $12/lb, up 4% from previous month |
| Molybdenum | 3,398 metric tons | 59% increase | $19.99/lb, up 1% from previous month |
Economic Indicators
Mining GDP
- 17% increase in February 2024 compared to February 2023
- 11% growth in January-February 2024 compared to the same period in 2023
The growth is mainly explained by higher extracted volumes of copper, gold, molybdenum, and tin.
Investments
- February 2024: $362 million
- 42% increase compared to February 2023
- 27% increase compared to January 2024
- January-February 2024: $646 million, 22% increase year-over-year
The monthly increase is explained by higher levels of investment across all categories, particularly in infrastructure ($25 million more) and development and preparation ($14 million more). Companies that reported higher investments include Angloamerican Quellaveco ($48 million more), Chinalco ($21 million more), and Las Bambas ($21 million more).
Exports
- February 2024: $3,223 million, 13% increase compared to February 2023
- 4% increase compared to January 2024
- January-February 2024: $6,319 million, 14% increase year-over-year
The monthly increase is mainly explained by the higher value of copper shipments ($239 million more), gold ($253 million more), and tin ($35 million more). Gold and tin export values benefited from both higher volumes and prices, while copper’s increase was due to higher volume. In February, copper represented 51% of the value of mining exports, gold 31%, and iron 5%. Mining exports accounted for 62% of the country’s total exports for the month.
Key Trends and Observations
- Significant recovery in production across most metals compared to February 2023, partly due to the low base effect from social protests last year.
- Strong growth in mining GDP, reflecting the sector’s recovery and importance to Peru’s economy.
- Continued expansion of operations at Anglo American Quellaveco, contributing to increased copper and molybdenum production.
- Mixed price trends for metals, with some facing downward pressure due to global economic factors, particularly in China.
- Substantial increase in mining investments, indicating confidence in the sector’s future despite some challenges.
- Robust export performance, with mining continuing to be a crucial component of Peru’s export basket.
- Ongoing influence of global market dynamics, particularly Chinese demand, on Peru’s mining sector performance.
Conclusion
February 2024 showcased a strong recovery in Peru’s mining sector compared to the previous year, with significant increases in production, investments, and exports. The growth in mining GDP and the substantial rise in investments indicate a positive outlook for the sector. However, fluctuating metal prices and the dependence on global demand, particularly from China, highlight the need for continued adaptability in the face of international market dynamics. As Peru’s mining industry continues to play a crucial role in the country’s economy, maintaining this growth trajectory while addressing any operational and social challenges will be key to ensuring sustainable development in the sector.
