Mining Investments Seen Totaling $10 Billion In 2012

Mining investments in Peru could reach a new record this year at $10 billion, according to a projection by the Peruvian Institute of Economics (IPE).

IPE director Miguel Palomino said that mining investments have increased in Peru at a rate of 35 percent per year over the past five years, state news agency Andina reported. In 2011, mining companies spent a record $7.2 billion in the Andean nation.

Palomino said that in the first five months of this year, investments in mining, which is an important driver of Peru’s economy, are up 20 percent compared to 2011.

Overall, Peru’s portfolio of mining investments is about $53 billion. If these projects are developed, they will increase total exports by $30.3 billion a year and raise the gross domestic product by $44 billion annually. The increases consider the indirect effect of the mining investments on other sectors

Almost 2.5 million jobs will be created directly and indirectly by the investment projects, Palomino says.

“Mining has a large and growing inter-relation with the rest of the economy,” he said. “The demand for inputs and services boost activities like transportation services and warehousing.”

The mining industry also faces challenges, however, from social conflicts in different areas of the country.   The People’s Ombudsman reported 168 active social conflicts in July, of which 148 are related to environmental issues.  Among conflicts related specifically to mining, many also are related to local community benefits and development.

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