Deep Dive: Mayra Figueroa: Strengthening trust key to Peru mining investment projects

Mayra Figueroa, speaking through the Institute of Mining Engineers of Peru (IIMP), identifies strengthening trust as the pivotal mechanism for unlocking investment projects, particularly in Peru's mining sector. This reflects a core economic challenge where investor confidence directly influences capital allocation in capital-intensive industries like mining, which constitutes over 60% of Peru's exports and 10% of GDP according to World Bank data (2022 figures). Without trust—stemming from regulatory stability, social license from communities, and policy consistency—projects stall, leading to forgone foreign direct investment (FDI) inflows, which averaged $8.5 billion annually pre-2020 but dropped 20% amid social conflicts per Central Bank of Peru reports. From the Chief Economist lens, this underscores Peru's macroeconomic vulnerability: mining FDI funds fiscal balances, with copper and gold revenues covering 50% of export earnings (INEI data). Eroded trust amplifies fiscal deficits (currently 2.8% of GDP, IMF 2023), risking currency depreciation (sol weakened 5% YTD) and inflation pass-through to households. Chief Financial Analyst perspective notes market signals: Peru's mining equities (e.g., Southern Copper) trade at 15% discounts to peers due to project delays, per Bloomberg indices, deterring portfolio inflows estimated at $2-3 billion yearly. Senior Consumer Finance Advisor highlights household ripple effects: stalled projects curb job creation (mining employs 200,000 directly, supports 1 million indirectly per Ministry of Energy and Mines), suppressing wage growth (2.1% real increase 2023) and remittance stability for rural families. Stakeholders include mining firms (e.g., multinationals like Newmont), local communities facing environmental concerns, and government agencies enforcing concessions. Implications extend to global commodity chains: Peru supplies 12% of world copper (USGS 2023), so delays elevate prices 5-10% short-term, impacting U.S./EU manufacturers. Outlook hinges on trust-building via transparent EIA processes and community revenue sharing (e.g., canon minero distributing 50% of taxes), potentially reviving $50 billion project pipeline (ProInversión 2023). Failure risks credit rating downgrades (current Baa1 Moody's), raising borrowing costs 100-200 bps for sovereign debt. Broader context: Peru's 2022-2023 political instability (six presidents in eight years) eroded institutional trust, halving mining approvals (from 250 to 120 annually). This event signals industry pushback, aligning with IMF recommendations for governance reforms to sustain 3-4% GDP growth trajectory.