After Chile, no country in Latin America has leveraged its geology into national economic growth as effectively as Peru. But with such wealth creation has come jealousy, rivalry, and political opportunism. Elevated prices and a COVID-weakened economy have drawn even more prospectors to Peru’s immense informal/illegal gold mining industry. This industry is the root cause of two of the biggest pre-investment risks to mining in Peru: community opposition and security.
Community opposition to large projects stems from both legitimate and dubious sources of grievance. The lack of education and training among local populations in the sierra often disqualifies them from being employed after the construction phase. Fiscal crises that crop up in Lima from time to time have led to the trickling of royalty flows to local communities. Illegal miners and organized crime syndicates are also known to help organize local opposition to large mines that threaten their livelihood.
Due to this, it’s more crucial than ever for investors to conduct mining project due diligence in Peru. To augment their intelligence gathering, they may want to consider a free resource: the 2022 Latin America Mining Risk Index.
The Index and the resulting report represent an effort by AMI to help mining, energy and infrastructure operators quantify and compare local community risk across the region. It provides a quantitative framework to measure and compare, among other risks, the economic self-interest of the many stakeholders impacted by a mine, from local vendors, unions, and competing businesses to the executive branch in the region’s leading mining jurisdictions. Please click below to learn more about this unique report, the first to quantify mining risk in Latin America, and learn more about how it can help you in evaluating pre-investment risk to mining in Peru and Latin America.