Some of the world’s biggest miners say they like what they’re hearing from Peru’s new leftist government of late, further easing fears that drastic policy changes could stall future output in the No. 2 copper nation.
Freeport-McMoRan boss Richard Adkerson said at an industry event last week he was left “encouraged” from a recent meeting with President Pedro Castillo, a former rural union activist from a Marxist party. At the same conference two days earlier, BHP Group’s president for minerals in the Americas, Ragnar Udd, complimented the government’s “strategic” approach.
The praise marks a sharp turnaround from the investor anxiety that surrounded elections in April, when Castillo vowed to nationalise assets, block projects and take a bigger share of the mineral windfall to fight poverty. The polarising process spurred concern that a far more onerous operating environment would derail investments needed to help fill a looming copper supply gap as the world tries to wean itself off fossil fuels.
Adkerson, Udd and other executives speaking this week at the virtual Peruvian event known as Perumin highlighted the huge potential for the South American nation to capitalise on rising global demand to boost communities and the broader economy. But given mining’s historically tense relations with communities in Peru, speakers were also clear to underscore the industry’s collaborative and sustainable approach going forward.
And while the more moderate factions in the administration may have won favour of late, Castillo still plans to raise taxes to fight poverty — which explains some cautionary remarks.
“Other nations are also well resourced, and the nature of this industry is that not every opportunity will be realised — investment capital is a finite resource that competes on a global scale,” BHP’s Udd said.
American mining veteran Adkerson, who oversees the top publicly traded copper company, also spoke of the “complicated issues” that still have to be addressed. “But as miners, we want to listen to the problems and find ways of working with the government, communities and the country in trying to address them,” the Freeport CEO said.