The price of gold continues its march northwards fueled by the ongoing pandemic, trade tensions between the US and China and general uncertainty in global markets. At the same time, copper production in the region has been declining while Chinese demand has been rising, resulting in prices not seen for two-years. This is a huge opportunity for several Latin American countries.
“Without an effective treatment for Covid-19 and while there is the possibility of new out breaks, it is likely that the price of gold will remain high, at close to USD 2,000 / oz,” predicts a Peruvian fund manager. Copper closed on the London Metal Exchange on 19 August at its highest level since June 2018, surpassing USD 3 / pound.
“It is likely that the price of gold will remain [high].”
Peruvian fund manager.
Peru must capitalise on this.
The chief economist at a Peruvian investment bank is seeing some reactivation of production, “Two or three months ago, mining production was operating between 25% and 30% of its capacity but this may reach between 70% to 80% in the coming months.”
A well-known Peruvian economist and former advisor to the government believed it was all happening too slowly, “The logical thing is to fast track mining projects, but nothing is happening. These are lost opportunities for the country, there are USD 57 billion of mining projects that need to be reactivated.”
“The logical thing is to fast track mining projects, but nothing is happening”
Former economic advisor to Peruvian government.
Peru would see great economic benefit from increasing mining output but social conflict and political instability aren’t helping. A few weeks ago, a pumping station supplying Glencore’s Antapaccay copper miner was attacked, with the attackers demanding greater state support to combat coronavirus in these remote areas that are frequently ignored.
The resurgence of conflicts occurs as the government of President Martín Vizcarra seeks to emerge from a political crisis, with the appointment of a new chief of cabinet of ministers – the second in three weeks – in the midst of a struggle with a fragmented Congress dominated by the opposition.
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