Peru’s Copper Output Stagnates for a Third Consecutive Year
Peruvian copper production is projected to remain flat in 2025, marking the third consecutive year of stagnant output, according to industry analysts and the country’s leading mining association, SNMPE.
Challenges such as declining ore grades and a lack of new mining projects continue to cap production, even as global demand for copper surges.
Peru, the world’s third-largest copper producer, was overtaken by the Democratic Republic of Congo (DRC) in 2023 for the second spot behind Chile.
The decline in ore quality after years of extraction is straining miners’ ability to maintain output. This comes as the world braces for a significant copper supply deficit driven by growing demand from electric vehicles, renewable energy projects, and data centers.
Copper prices on the London Metal Exchange (LME) have shown volatility, starting the year at $8,580 per metric ton and now hovering around $8,869 per ton, down from a record high of over $11,000 in May.
These price fluctuations highlight the increasing pressure on major miners to secure future supply through acquisitions, such as BHP’s unsuccessful $49 billion bid for Anglo American earlier this year.
SNMPE predicts that Peru’s copper production in 2025 will remain at 2.8 million metric tons, matching the output of 2023 and the forecast for 2024. “By 2025, Peruvian copper production is expected to be similar to this year’s expected 2.8 million tons,” said SNMPE President Victor Gobitz. The Peruvian Ministry of Mines has not released an official forecast for 2025.
Juan Carlos Ortiz, Vice President of Peru’s Institute of Mining Engineers and an executive at Minas Buenaventura, echoed this sentiment, attributing the flat outlook to the absence of new projects.
Peru’s most recent significant mine, Anglo American’s $5.5 billion Quellaveco, began operations in 2022, contributing over 10% of the country’s current production capacity with an annual output of 300,000 tons.
New projects such as Southern Copper’s Tia Maria (expected to begin production in 2027) and Teck Resources’ Zafranal (projected for 2029) could add 150,000 tons annually. However, these developments are years away from significantly impacting the nation’s production levels.
In response to declining ore grades, miners are focusing on boosting processing capacity. Of the $3.8 billion invested in Peru’s mining sector this year, most went toward concentrator plants and equipment, marking a modest 2% increase from 2023.
Energy consumption in copper mines also rose 2.3% year-over-year through October, according to COES, the private energy sector body.
“What matters now is that work continues,” said Gobitz, emphasizing the importance of smaller projects like Tia Maria, Zafranal, and mine expansions. However, he noted the absence of a large-scale project like Quellaveco in the pipeline.
Official data through October reveals that seven of Peru’s ten largest copper mines reported lower production compared to 2023. Cerro Verde, Peru’s largest mine operated by Freeport-McMoRan, experienced a 5.4% year-on-year decline, with the company attributing the drop to lower ore grades.
Linda Hayes, a Freeport spokesperson, emphasized that operational improvements are underway but called on Peru’s government to streamline regulatory processes and support exploration to address the challenges facing the sector.
Despite ongoing struggles, Peru has an opportunity to reclaim its position as the world’s second-largest copper producer. By August 2024, the DRC’s copper production had fallen nearly 6% from 2023, while Peru’s output dropped by less than 1%, leaving room for the South American nation to pull ahead.
With strategic investments and regulatory reforms, Peru could strengthen its position in the global copper market and capitalize on the anticipated supply-demand gap in the coming decade.
