Víctor Gobitz, President,

PERUVIAN INSTITUTE OF MINING ENGINEERS (IIMP)

"The mining industry is so important to the country that there should be a defined mining policy, in the same way Peru has solid tax policies and macroeconomic policies. This would assure continuity regardless of government changes."

What are the priorities of IIMP for 2021?

A key priority for the industry and the country is to tackle the pandemic. During the first wave, Peru was the only mining country that shut down mining operations, and that was a mistake. The more than two months that were lost in terms of production had an impact on the economy. So, it is a priority to maintain the dialogue with the authorities during the second wave.

Beyond this, we will have a new government taking over in July 2021. During this election process, the industry will have to be active to send its messages to the public. Over the last two years, we have seen two positive initiatives by the government, supported by IDB. The first one is the ‘Rimay’ initiative to define a vision of the mining industry towards 2030, an effort that needs to be continued now at a regional level. The second one was the creation of an inclusive working group to work on the industry’s long-term sustainability. The mining industry is so important to the country that there should be a defined mining policy, in the same way Peru has solid tax policies and macroeconomic policies. This would assure continuity regardless of government changes.

What measures are being taken to prevent contagion during the second wave of the pandemic?

The mining industry in Peru already followed global standards before the pandemic in terms of industrial safety, occupational health and the environment. With these three pillars, we have now implemented a fourth pillar related to the pandemic. The formal mining industry is using the molecular tests, which offer a higher level of accuracy than the rapid tests. Molecular tests are done when workers enter or leave the camp. Also, distancing measures apply to workers while they are on site, with isolated working cells. This protocol is working well, and it will probably continue over time. Of course, it means significant extra costs for mining operators.

Considering the current high metals prices, how can the government, associations and mining companies work together to ensure that new projects are developed to take advantage of this context?

Metal prices have recovered and this is excellent for the country’s coffers, while also mining companies are in a better position to develop new projects. This said, we need to look at the bigger picture; this is where our vision to 2030 as a country and as an industry is key. Peru has an enormous infrastructure deficit and the best way to fund infrastructure investment is through the income provided by mining, generating a virtuous circle for employment and development. Peru’s project portfolio in mining is around US$60 billion, while the infrastructure deficit is worth nearly US$100 billion.

To what extent do you think the presidential elections in 2021 could impact Peru’s mining industry?

There is going to be a lot of noise. The campaign is going to be throwing lots of populist ideas to the public, and most probably the new government will not have control over Congress. Whoever is elected will need to have a very fluid communication with the different economic and political actors.

What were the main themes of the IIMP’s ProExplo virtual event in March 2021?

ProExplo is focused on the exploration segment. One of our objectives is that those in charge of public policy understand that exploration is a high-risk activity with a minimal environmental impact. Yet, the permits are similar to those that a mining operation requires. If that is not addressed, we will continue seeing a decrease in exploration expenditures, which is highly damaging to a mining country like Peru.

2021 is the 200 year anniversary of Peru’s independence. By the end of the year, what changes would you like to see in the country’s mining industry?

Peru’s geological richness offers huge operations like Cerro Verde, Las Bambas and Antamina, as well as narrow vein operations and artisanal mines. As a country, we need to promote large investments but also formalize the artisanal mining industry that is linked to gold production. It is estimated that half a million people are involved in artisanal mining, and this industry is not paying any taxes and is leaving a wide portfolio of environmental liabilities. This is the greatest challenge that needs to be addressed by the industry.

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