The announcement of the United Plan by the Peruvian government has multiple very positive aspects for the mining sector, which is of special interest for the Company given our current operations and expansion plans in the country.
Undoubtedly, the most relevant measure is the “mining debottlenecking shock” (measure #5), which contemplates 13 specific management actions and regulatory changes to boost the sector. Although the 13 measures have not yet been detailed, the government’s express commitment to promoting mining sets a very positive precedent. These debottlenecking measures are expected to include permitting facilitation, improvements in prior consultation processes, resolution of latent social controversies, and tax incentives, among others.
Another very positive aspect is the plan to accelerate the execution of electric infrastructure projects (measure #22) with investments of $1.584 billion in 2024. The development of energy infrastructure is essential to enable operations in current mines and new greenfield projects. Likewise, the government’s commitment to unblock mining projects for $4.646 billion by 2025 and a total of $46.657 billion in subsequent years (measure #21) indicates the willingness to facilitate new mining investments.
Beyond mining, there are other elements of the United Plan that would have a positive impact. For example, measures to promote agro-exports (#3 and #4) would improve logistics and facilitate food supply to mining areas. Water infrastructure projects (#4) would also strengthen the provision of this critical resource for mining in southern regions like Arequipa.
The United Plan establishes an unprecedented commitment by the current Peruvian government to reactivate the mining sector. If these 25 measures are effectively implemented, our company would be able to considerably expand its operations in the country, actively participating in the potential mining boom that is emerging thanks to these active policies to promote mining investment.
These announcements could not come at a better time for our company, as we are starting development of our Santa Bárbara polymetallic processing plant project in Peru’s prolific Yauyos mining district. The stage 1 of the Santa Bárbara project will establish an initial 350 ton per day processing capacity, with permits obtained to facilitate planned modular expansions. Feedstock will be sourced from Company’s mines, plus abundant surrounding artisanal operations. The phased Santa Bárbara rollout helps control capex while positioning us to leverage Peru’s debottlenecking for significant growth. The United Plan provides assurance that Peru actively supports projects like ours as we build out Santa Bárbara and eye further regional expansions.