The postponement of some large-scale investment projects in Peru has created an “irreversible problem” for the Andean nation, according to the head of the business association Confiep, Alfonso Garcia-Miró, according to daily El Comercio.
“I think that a lot of damage has been done to Peru. Some, a few people, will be judged in history for having paralyzed these investment projects. The tendency to invest by these large, global mining conglomerates now is less attractive,” he said.
Numerous large-scale mining projects have been delayed in Peru, most notably the $5 billion Minas Conga gold and copper project owned by Newmont Mining and Buenaventura. The suspension of some big projects has been due to community opposition, and Conga is certainly due entirely to that, in a situation poorly handled by both the project developers and the government, the latter for first procrastinating its intervention and then coming down hard on the protesters, which led to the opposition’s total intransigence.
The community opposition that arose over the past decade came at the time of a global commodity boom. Now that metal prices have tanked, and the future outlook for these commodities has dimmed, some of the projects could be considered unprofitable.
Buenaventura executives have said recently that they still plan to go ahead with Minas Conga, if they can overcome the community opposition. Other companies are reviewing their projects economics to see if they can reduce costs.
Business confidence has been hurt as a result of the slowdown in China, which has affected commodity prices, and domestic political issues. Garcia-Miró said he is confident there will be a recovery in investor confidence.