The Peruvian Mining Sector is the backbone of the national economy, and by virtue of this, there is overwhelming government support at the local, regional and national levels for the sector; This creates a positive investment climate for foreign mining companies.
Significant investment in recent years has seen an increase in the production of Copper, Gold and Base Metals in Peru, making the mining sector the country’s growth engine. Growth within the sector has occurred due to the completion of a series of mega-projects such as the Las Bambas project for USD $ 7.4 billion, but also due to growth in the Junior Mining Sector. The size and scope of the growth experienced within the Junior Mining Sector is unprecedented in many cases and, at least in part, can be attributed to the current permitting system in Peru.
Whereby the Ministry of Energy and Mines has granted the Regional Directorate of Energy and Mines (that is, Provincial Level) the power to approve Small Miners (PPM), through a relatively expeditious process (typically varies between 18 and 24 months), is cheaper and requires a lower threshold of studies / supporting documentation. For this to happen, a project must not exceed 2,000 hectares, and not have a maximum installed production and / or processing capacity greater than 350 metric tons per day (for metallic production) or 1,200 tons per day (for non-metallic production). . This system has resulted in an influx of foreign-owned junior mining companies (many ASX and TSX.V) seeking to establish small operating mines (especially within the gold sector) and / or establish processing facilities and purchase feed material from local miners (i.e. Toll Laundering).
On the back of this, the “toll laundering” model has become an attractive business model, often emulated by new players and highly publicized in the markets (both ASX and TSX), some of the current players / previous industry are:
– Minera Gold
– Standard Tolling Corp.
– Anthem United Inc
– Montan Mining
– Inca Gold
Mining toll and / or direct laundering provides the opportunity for a Junior mining company to enter the market and produce continuous cash flows to support company operations. Although the toll laundering market is increasingly crowded, it remains a ray of hope for companies that have not been able to find a project worth exploring and / or have not been able to raise funds to undertake exploration. In the wake of this explosion within the Peruvian Junior Mining Sector, there is a significant opportunity for mining equipment, technology and services (METS) companies that can provide systems, procedures and / or equipment that can support this business model. It is noteworthy that today many of the processing facilities used in Peru are locally manufactured, with lower than desirable recovery rates and limited availability. Therefore, some specific opportunities include:
– Provision of metallurgical consulting services
– Provision of consultancy in planning and production of small-scale mines
– Supply and Support of Small Gold Processing Plants (up to 350 tons per day)
– Provision of equipment status monitoring systems
– Other general support systems for small-scale operations.
The Peruvian mining sector is truly the lifeblood of the Peruvian economy, as much of the government effort has been devoted to developing a legal framework / system that supports foreign investment, in turn this has created an opportunity for property-owned mining companies. junior foreigner and METS. within the market.