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PERUVIAN MINING 13° Conferencia de la Economía Alemana para Latinoamérica

Rómulo Mucho President Peruvian Institute of Mining Engineers


INTERNATIONAL PERSPECTIVE Fiscal Cliff of United States economy

European economic crisis

Desaceleration in China’s growing Iron quotation down

Inverstors are looking countries offering better conditions

Investment Competitiveness

•Taxation •Social •Mining Laws •Environment •Land use •Labor


TRADE INTEGRATION OF PERU We have a globalized economy with excellent access to important markets which represents 4 billion people market with a GDP of US$ 56 trillion

Actual agreement Acuerdo vigente

Almost agreement Acuerdoactual por entrar en vigencia

Agreement Acuerdo processde Acuerdo en en inproceso proceso de negociaci贸n negociaci贸n


CONSIDERATION FACTORS FOR MINING INVESTOR

• Social conflicts.• SENACE creation • Prior Consultation • Land Use Planning • Governance • Mining policies


WE HAVE MINING IN 17 OF 24 REGIONS OF PERU •

Of 24 national regions, in 17 of them we have mining activities.

We have an enormous quantity of polymetallic mining resources, with 16% of mining reserves in the world, with 40 types of metals. It is exploted 16 types of metals, 99% correspond to copper, silver, lead, zinc, iron and gold.

Mining exports in 2012 was of US$ 25,067 million that represent 12.5% of GDP and 57% of the total exports.

59% corresponds to gold and copper, and the portfolio of mining projects for the next 6 years are more than US$ 54 billion.


MINING EXPLORATION INVESTMENT (US$ 21.500 millions worldwide) 1.025

Source: MINEM

4.7% OF THE WORLD INVESTMENT


PERUVIAN MINING RESOURCES

Source: USGS

Metal

World Ranking

%

Cu

2

13

Au

8

4

Ag

1

22

Zn

3

7.6


MINING EXPORTS (US$ millions)

27,361

57% of the total exports in 2012

21,723 17,439

18,101 16,382

14,735 9,790 7,124 3,205

3,809

2000 2001 2012*BCRP Source:

2002

3,220

4,690 2003

2004

2005

2006

2007

2008

2009

2010

2011

25,067


INVESTMENT IN MINING (US$ millions) 8.549 7,202

4,068 2,822 1,500

2000

1,610

1,320

2001

Source: MINEM

1,015 1,086

611

500

2002

2003 2004

2005

2006

1,708 1,249

2007

2008

2009 2010

2011

2012*


INVESTMENT PORTFOLIO IN MINING US$ 53,423 millions

In exploration 46%

In Expansion 16%

Source: MINEM

With EIS presented 1%

With EIS approved 37%


BENEFITS IN THE COMING YEARS With the development of new projects with EIS approved and projects in expansion

US$ 14.877 millions of exports annually

Would increase annual GDP US$ 21,869 millions Source: Peruvian Institute of Economy/SNMPE

Would create 1.1 million stable jobs during its operation

Can increase tax revenues over US$4,500 millions annually


PERUVIAN EXPORTS ( FOB US$ millions) 2011

2012

Dic. Traditional products Fishery Agriculture Mining Oil and natural gas Nontraditional products Farning Fishery Textiles

Nov.

Var. % of December previous month

Dic.

A単o

12 months

2011

2012

Var. %

3353 94 228 2572 459 1002 347 97 197

2787 116 127 2110 434 999 338 70 199

2757 72 74 2217 395 968 345 72 174

-1.1 -37.8 -41.7 5.1 -9.0 -3.1 2.1 1.5 -12.8

-17.8 -23.0 -67.6 -13.8 -14.0 -3.4 -0.6 -26.0 -12.0

35837 2099 1672 27361 4704 10130 2830 1047 1986

34247 2292 1075 25921 4959 11047 3047 1011 2157

-4.4 9.2 -35.7 -5.3 5.4 9.1 7.6 -3.5 8.6

36

38

41

8.1

13.9

398

432

8.6

Chemical Nonmetallic mining

133 54

137 63

131 57

-4.5 -10.2

-1.6 5.1

1645 487

1624 716

-1.3 46.9

Steel-metallurgy and jewelry

90

100

101

0.6

11.6

1128

1253

11.1

36 13 29

40 14 30 3816

38 11 32 3757

-4.7 -20.4 6.2 -1.5

6.4 -12.6 7.8 -14.3

464 145 301 46268

532 275 345 45639

14.7 89.6 14.8 -1.4

Wood, papers and its manufactures

Metal-mechanic Others 1/ Others 2/ Total exports

4385

1 / Including skins, leather and handicrafts, mainly 2 / Includes the sale of fuel and food to foreign vessels and repair of capital goods. Source: SUNAT


IMPORTANT MINING PROJECTS

Investment US$ Million

Production t Cu

Start-up Operation

Antapaccay

1,500

160,000

dic-12

Antamina (Expansion)

1,300

175,000

dic-12

Toromocho

3,500

275,000

nov-13

Constancia

1,500

80,000

jul-14

Las Bambas

5,200

315,000

dic-14

Cerro Verde (Expansion)

4,400

272,000

jul-15

Quellaveco

3,300

225,000

jul-16

20,700

1,502,000

Total

Source: MINEM


PROJECTION FOR THE NEXT TWO YEARS (US$ MILLION)

INVESTMENT

2013

2014

Expansions

1,322

2,595

New Projects in construction

5,245

3,819

In Exploraci贸n

1,000

1,200

In Production

2,000

2,300

9,567

9,914

Total

Source: MINEM


PROJECTION FOR THE NEXT TWO YEARS INVESTMENT US$ MILLION PROJECT

PRODUCTION YEAR

TOTAL

EXECUTED

IN EXECUTION

PROJECTION 2013

2014

EXPANSIONS

Cuajone Expansion Lagunas Norte Expansion Marcona Expansion Toquepala Expansion Bayovar Expansion Cerro Verde Expansion

2013 2013 2013 2014 2014 2016

300 400 1,200 600 520 4,400

180 338 0 305 0 998

120 62 1,200 295 520 3,402

120 62 148 150 843

200 148 370 1,877

183 519 55 93 1,496 3,556 738 3,280 3,257 111

183 519 55 47 964 1,722 246 803 651 55

47 191 1,833 246 796 651 55

NEW PROJECTS IN CONSTRUCTION

Inmaculada Toromocho Alpamarca-Rio Pallanga Invicta Constancia Las Bambas Marcobre (Mina Justa) Quellaveco Minas Conga (Stopped) Crespo

2013 2013 2013 2014 2014 2014 2015 2016 2014 2014

315 3,500 90 93 1,546 5,200 744 3,300 4,800 111

132 1,681 35 0 50 1,644 6 20 1,543 0


NEW MINING PROJECTS IN PERU

PROJECT

COMPANY/ COUNTRY

LOCATION

MAIN MINERAL

INVESTMENT US$ MMS

START-UP

ANNUAL PRODUCTION (t)

Los Calatos

Minera Hampton/ Australia

Mariscal Nieto, Moquegua

Cu

2,200

2018

107,000

Cañariaco

Cañariaco Copper / Canada

Ferrreñafe, Lambayeque

Cu

1,599

Stand by

119,000

Zafranal

Minera AQM Copper/Canada

Huancarqui, Arequipa

Cu/Au

1,520

Stand by

103,000 Cu 30,000 Oz/ Au

Guadalupito

Latin Resources/ Australia

Áncash

Fe

620

2015

1.5 - 3.1 mlls. Tm

Accha

Exploraciones Collasuyo/Canada

Accha, Cusco

Zn/Pb

524

2015

60,000 Zn, 40,000 Pb

Quechua

Compañía Minera Quechua/Japan

Espinar, Cusco

Cu

490

2014

60,000

Source: IIMP


NEW MINING PROJECTS IN PERU PROJECT

COMPANY/ COUNTRY

LOCATION

MAIN MINERAL

INVESTMENT US$ MILLION

START-UP

ANNUAL PRODUCTION (t)

Rondoni

Compañía Minera Vichaycocha/Peru

Cayma, Huánuco

Cu

350

2016

50,000

Ollachea

Cía. Minera Kuri Kullu/Australia

Ollachea, Puno

Au

170

2014

117,000 Oz

Salmueras de Sechura

Americas Potash/Canada

Sechura, Piura

K

125

In Study

250,000

Llama TY01

Jintong Mining/ China

Huancano/ Humay, Ica

Au

In Study

In Study

Cercana

Junefield Group/ China

Yarabamba, Arequipa

Cu

In Study

In Study

In Study

Cerro Ccopane

Minera Cuervo /Canadá-Australia

Omacha, Cusco

Fe

In Study

In Study

In Study

Source: IIMP

In Study



Peruvian Mining