January 2024 marked a significant improvement in Peru’s mining sector compared to the same month in 2023, with most metals showing increased production. The mining GDP grew by 5%, largely due to higher extracted volumes of gold, zinc, molybdenum, and tin. This growth is partially attributed to a low comparative base in January 2023, when mining operations were affected by social protests in the country.
Production and Prices
Copper
- Production: 205,000 metric tons
- 1% decrease compared to January 2023
- 20% decrease compared to December 2023
- Price: $3.79/lb, down 1% from December 2023
The slight decline in copper production was due to lower output from Cerro Verde (-13%), Las Bambas (-17%), and Chinalco (-22%), among others. These results were partially offset by increased production from Southern (+16%), Antamina (+1%), and Angloamerican (+3%). The price decrease was attributed to increased inventories in the London Metal Exchange and lower-than-expected growth in China.
Gold
- Production: 9.4 metric tons
- 26% increase compared to January 2023
- Price: $2,034/oz, down 0.1% from December 2023
The increase in gold production was due to higher volumes reported by Yanacocha (+131%), Baroo Misquichilca (+219%), and Poderosa (+2%), among others. However, Aurífera Retamas reported a 20% decrease in production. The slight price decrease was due to the appreciation of the dollar and the increase in U.S. Treasury bond yields.
Silver
- Production: 251 metric tons
- 17% increase compared to January 2023
- 15% decrease compared to December 2023
- Price: $23/oz, down 4% from December 2023
The higher silver production in January was due to increased output from Chinalco (+47%), Ares (+52%), and Volcan (+38%), among others. However, Antamina (-28%) and Nexa El Porvenir (-5%) reported lower production levels. The price decrease was attributed to the same factors affecting gold prices.
Zinc
- Production: 104,000 metric tons
- 5% increase compared to January 2023
- 30% decrease compared to December 2023
- Price: $1.15/lb, up 1% from December 2023
The increased production was due to higher volumes reported by Volcan (+11%) and Nexa Perú (+31%), which offset lower production from Antamina (-30%) and Nexa El Porvenir (-5%). The price increase was attributed to the announcement of new economic stimuli and a cut in the reserve requirement ratio in China, which increases credit availability.
Other Metals
| Metal | Production | Year-over-Year Change | Price |
|---|---|---|---|
| Lead | 22,000 metric tons | 16% increase | $0.95/lb, up 3% from December 2023 |
| Iron | 1,126,000 metric tons | 7% decrease | $136/ton, down 1% from December 2023 |
| Tin | 2,530 metric tons | 180% increase | $11/lb, up 2% from December 2023 |
| Molybdenum | 2,606 metric tons | 9% increase | $19.82/lb, up 7% from December 2023 |
Economic Indicators
Mining GDP
- 5% increase in January 2024 compared to January 2023
The growth is mainly explained by higher extracted volumes of gold, zinc, molybdenum, and tin.
Investments
- January 2024: $285 million
- 4% increase compared to January 2023
- 60% decrease compared to December 2023
The year-over-year increase is explained by higher levels of investment in mining equipment ($6 million more) and exploration ($5 million more). In mining equipment, higher investments were observed from Chinalco ($13 million more) and Cerro Verde ($4 million more), while in exploration, increases came from Shougang ($2.1 million more) and Angloamerican ($1.3 million more).
Exports
- January 2024: $3,104 million
- 15% increase compared to January 2023
- 19% decrease compared to December 2023
The year-over-year increase is mainly explained by the higher value of shipments for most metals, except lead, zinc, and molybdenum. Higher export volumes and favorable prices boosted the export value of copper ($89 million more), gold ($440 million more), and iron ($42 million more). In January, copper represented 46% of the value of mining exports, gold 35%, and iron 6%. Mining exports accounted for 58% of the country’s total exports for the month.
Key Trends and Observations
- Recovery in production across most metals compared to January 2023, partly due to the low base effect from social protests last year.
- Growth in mining GDP, reflecting the sector’s recovery and importance to Peru’s economy.
- Mixed performance in copper production, with some major producers experiencing declines while others saw increases.
- Significant growth in gold production, driven by strong performance from key producers.
- Continued expansion of operations at Anglo American Quellaveco, contributing to increased molybdenum production.
- Volatility in metal prices, influenced by global economic factors, particularly Chinese demand and economic policies.
- Increase in mining investments, particularly in mining equipment and exploration, indicating confidence in the sector’s future.
- Strong export performance, with mining continuing to be a crucial component of Peru’s export basket.
Conclusion
January 2024 showed a promising start for Peru’s mining sector, with significant improvements in production and exports compared to the previous year. The growth in mining GDP and the increase in investments, particularly in exploration and equipment, indicate a positive outlook for the sector. However, the industry continues to face challenges, including price volatility and the ongoing need to balance production with environmental and social responsibilities. As Peru’s mining industry maintains its crucial role in the country’s economy, adapting to global market dynamics and local challenges will be key to ensuring sustainable growth in the sector.
Original Report: https://www.snmpe.org.pe/informes-y-publicaciones/boletin-estadistico-mensual/mineria/8446-boletin-estadistico-mensual-minero-enero-2024.html
