Doing Business in Peru

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Doing Business in PeruPeru has an enormous economic strength in the form of multiple mineral deposits and is currently ranked 4th in the world. It currently occupies 7th place among the Top 10 leading mineral - producing countries, with an estimated production value of US$ 27,063 million.

The primary competitive advantage for Peruvian mining is its diversification of minerals being produced: copper, gold, silver, lead, zinc, tin, molybdenum, iron, cadmium, mercury, selenium, indium and other metals. It is the region’s top producer of zinc, tin, lead and gold, and occupies second place in the production of copper, silver, molybdenum, mercury, selenium, cadmium and phosphoric rock. Currently, Peru has a sufficient reserve of minerals to generate a constant flow of metal production for several decades, according to the United States Geological Service.

The ready availability of hydro - electric and thermal energy resources, such as gas, within Peru, makes the cost of energy a competitive advantage for mining activity. Together with other factors such as the system of land registry, granting of mining concessions, which is one of the most modern and practical in the world, as well having a Risk Capital Segment (Junior Stock Exchange) inside the Lima Stock Exchange. Mining companies can find the political and socio-economic environment within Peru very attractive.

Mining activity has been one of the main factors of the development of the Peruvian economy in the last decade. Between 2003 and 2012, investment in mining has grown by more than 2,700%, advancing from US$ 305 million to US$ 8,568 million and currently has a 47% share of the total announcements of private investment projects for the period 2013-2015, according to the Banco Central de Reserva (BCRP). At the same time, mining activity contributes 14.7% of the Peru’s gross domestic product (GDP). Mining activity generates 10% and 16% of all tax revenues for Peru. The mining industry is Peru’s primary export industry and generates more than 210,000 direct jobs per year. Mining also produces 9 indirect jobs in various sectors within the economy.

Mining’s contribution to Peru has gone even further with the need for mining companies to play a social role together with the generation of value for their shareholders. This behavior is consistent with the results of our 2013 global survey of CEOs in which they recognize the importance of strengthening the bridge between industry and society to achieve success.

In 2003, the mining companies undertook work with the government to undertake voluntary activities for Sustainable Development in key mining centers and their regional support areas. In the five-year period 2007-2011, almost 26.1 million people benefited from projects of local development, education, selfemployment, infrastructure, nutrition, health and others, which involved investments of US$460 million.

The Peruvian Government is very aware of the importance of mining for the country. For that reason, it provides its support to the sector in a framework of legal stability, economic freedom and investment promotion. The principal objective of Peruvian mining policy is to develop mineral resources rationally, respecting the environment, and creating conditions for the mining companies and society in which they live and work to come together in harmony.

This document is the first in a series of Doing Business, which exclusively covers the mining sector. It provides a description of the key aspects of the sector to help you to make investment decisions in Peru. We feel that our 89 years of experience in Peru gives us a clear understanding of this great industry and, together with the professionalism, objectivity and financial acumen for which we are known, we hope we can be of service to you as you explore Peru.

Orlando Marchesi
Lead Partner, Mining

Fernando Gaveglio
Lead Partner, Assurance

Humberto Salicetti
Lead Partner, Advisory