Peru’s Mining Concessions at Crossroads as Lawmakers Weigh Changes
Peru Mining Concessions Under Threat: Lawmakers Push Changes Amid Illegal Mining Surge
Peru’s large-scale mining sector is increasingly concerned that lawmakers may alter the country’s rules on mineral rights, as Congress prepares to debate a proposed law that could favour small-scale operators.
As the world’s third-largest copper producer and South America’s leading gold exporter, Peru grants long-term concessions allowing major miners such as BHP Group, Glencore, and Anglo American to explore extensive territories for decades before production begins.
These concessions are a cornerstone of Peru’s mining industry. Changes to them could significantly affect the economy and deter foreign investment.
However, the rise of illegal mining and years of production delays have driven some lawmakers to push for shorter concessions aimed at smaller operators who can begin production quickly.
The issue surfaced privately at last week’s Perumin mining conference in Arequipa, attended by around 60,000 people. President Dina Boluarte publicly mentioned at the event’s closing ceremony that her government had proposed changes to the concessions regime, without providing further details.
Congress is now reviewing bills aimed at updating the legal framework for small-scale miners, including provisions to revoke concessions deemed idle or underutilized. Whether any of these bills will pass remains uncertain, but the debate is expected to influence Peru’s presidential and legislative elections next year.
Ivan Arenas, a consultant for mining companies on social conflict, warned that illegal miners are behind the push for reform. “They are spreading misleading claims to legitimize taking over concessions that are not theirs. Their message is gaining traction,” he said.
Mining executives voiced similar concerns. Carlos Gallardo, general manager of the Peruvian Institute of Economics, said: “It takes about 40 years to bring a mine into production in Peru. Cutting concession periods to 10 years would discourage large-scale investment.”
Many in the industry blame bureaucratic red tape for delays. The Peruvian Institute of Mining Engineers recently commissioned a study by Gallardo’s think tank, the Peruvian Institute of Economics (IPE), highlighting the importance of maintaining current concession rules.
The study argued that proposals to revoke concessions overlook the realities of mining development timelines in Peru.
According to IPE, illegal gold mining could generate $12 billion in exports in 2025, while illegal occupation of concessions has stalled about $7 billion worth of copper projects. Affected projects include Southern Copper’s Michiquillay and Los Chancas developments, and First Quantum’s Haquira copper project.
Jose Farfan, legal adviser for Anplaben, a trade association representing ore processing plants, said the debate remains unresolved. “There is no consensus in Congress. For now, this is a taboo subject,” he noted.
The outcome of this debate will have lasting implications for Peru’s mining sector, foreign investment climate, and the government’s ability to regulate the industry effectively.
