Andina

China's urban development to boost mining investment in Peru

13:03 | Lima, Jul. 16.

Urban development in China —and throughout Asia— will enhance the continuity of mining investment in Peru despite copper price decline over the past month, economist and ESAN university professor Cesar Fuentes affirmed.

After reaching US$3.30 per pound on June 8 this year, copper price dropped to US$2.77 per pound last Friday.

"I believe mining investments will continue because the issue of urban growth in China, as well as in Asia in general, goes on," Fuentes told Andina news agency.

"This will be more important than the manufacturing issue in the coming years," he added.

Despite the drop in copper price, Peruvian mining companies remain profitable, but to a lesser extent compared to times when the red metal stood above US$3 per pound.

On the other hand, he pointed out mining firms do not tend to inform about their costs of production, as they are deemed as trade secret.

"But, in general, what is known is that the Peruvian copper sector is quite competitive, globally speaking. Peru and Chile have the world's lowest unit costs in terms of production, and that makes them, broadly, the most competitive countries in the world," he noted.

In this regard, Fuentes remarked the demand for Peruvian copper comes mainly from Southeast Asia due to its urban growth and manufacturing industry.

He went on to add the demand is lower in the United States and European countries, as they have shifted from being manufacturing to service economies. 

(END) MDV/MDV/JAA/MVB

Published: 7/16/2018
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