Peru and Chile urged to speed up copper projects

As copper deposits in Peru and Chile are reaching the end of their useful life, both countries are being urged to unblock new projects to meet global demand and make the most of their potential.

Over 60% of copper projects worldwide facing uncertainty are located in Latin America, most of them in Peru and Chile. These projects are not operating, lack investment decisions or construction has not started, Simon Morris, head of base metals at consultancy CRU, said at the XV International Mining Meeting in Lima.

Morris said that US$123bn in investments must be executed in the next five years to start covering a copper deficit of 9.5Mt projected for 2030.

“It is a high number, but not impossible. Between 2011 and 2015, the industry invested US$115bn. What I want to highlight is that we are already entering the period [2025 and 2026] of uncertain projects that will be needed so that the gap is not so big,” he said.

Morris added that most demand, around 30%, will come from public services and around 15% from transportation.

A problem is that projects aren't as large anymore. In 2014, CRU's project pipeline with investment commitments included 14 projects with annual production above 300,000t each, while the 2024 pipeline has only one.

“The total supply of projects has been reduced from 100 in 2014 to 70 in 2024. The number is falling very quickly,” Morris said.

He also said that more companies from the US, Canada and the EU are owning these projects. “Regardless of whether this can be interpreted as something good or bad, they are companies that take a little longer to develop projects, have high capex requirements, return expectations, among other factors.”

Despite incentives such as solid commodity prices and improving cooperation among companies, governments, academia and civil society, CRU expects difficulties.

"We'll have to inject the greatest amount of money in the next five years, and it's going to be a considerable challenge. This will be even more difficult as they involve investment commitments in jurisdictions with regulatory, political and social complexities. The latter implies that, although investment will not be canceled, it could be delayed," Morris said.

"Instead of seeing investments in new projects, we're going to see mergers and acquisitions between companies to carry out complex initiatives."