13 Conferencia Latinoamrica de la Economa Alemana

PERUVIAN MINING
Rmulo Mucho
President Peruvian Institute of Mining Engineers

INTERNATIONAL PERSPECTIVE
Fiscal Cliff of United States economy European economic crisis Desaceleration in Chinas growing Iron quotation down

Inverstors are looking countries offering better conditions

Investment Competitiveness

Taxation Social Mining Laws Environment Land use Labor

TRADE INTEGRATION OF PERU

We have a globalized economy with excellent access to important markets which represents 4 billion people market with a GDP of US$ 56 trillion

Actual agreement Acuerdo vigente

Almost actual agreement Acuerdo por entrar en vigencia

Agreement Acuerdo en in proceso process de negociacin negociacin Acuerdo en proceso de

CONSIDERATION FACTORS FOR MINING INVESTOR

Social conflicts. SENACE creation

Prior Consultation
Land Use Planning Governance Mining policies

WE HAVE MINING IN 17 OF 24 REGIONS OF PERU

Of 24 national regions, in 17 of them we have mining activities. We have an enormous quantity of polymetallic mining resources, with 16% of mining reserves in the world, with 40 types of metals. It is exploted 16 types of metals, 99% correspond to copper, silver, lead, zinc, iron and gold. Mining exports in 2012 was of US$ 25,067 million that represent 12.5% of GDP and 57% of the total exports. 59% corresponds to gold and copper, and the portfolio of mining projects for the next 6 years are more than US$ 54 billion.

PERUVIAN MINING RESOURCES

Metal Cu Au Ag Zn
Source: USGS

World Ranking 2 8 1 3

% 13 4 22 7.6

INVESTMENT IN MINING (US$ millions)

8.549 7,202

4,068 2,822 1,500 1,320 611 500 1,610 1,015 1,086 1,708 1,249

2000

2001

2002

2003 2004

2005

2006

2007

2008

2009 2010

2011

2012*

Source: MINEM

PERUVIAN EXPORTS
( FOB US$ millions)
2011 Dic. Traditional products Fishery Agriculture Mining Oil and natural gas Nontraditional products Farning Fishery Textiles Wood, papers and its manufactures Chemical Nonmetallic mining Steel-metallurgy and jewelry Metal-mechanic Others 1/ Others 2/ Total exports 3353 94 228 2572 459 1002 347 97 197 36 133 54 90 36 13 29 4385 Nov. 2787 116 127 2110 434 999 338 70 199 38 137 63 100 40 14 30 3816 2012 Dic. 2757 72 74 2217 395 968 345 72 174 41 131 57 101 38 11 32 3757 Var. % of December previous month -1.1 -37.8 -41.7 5.1 -9.0 -3.1 2.1 1.5 -12.8 8.1 -4.5 -10.2 0.6 -4.7 -20.4 6.2 -1.5 12 months -17.8 -23.0 -67.6 -13.8 -14.0 -3.4 -0.6 -26.0 -12.0 13.9 -1.6 5.1 11.6 6.4 -12.6 7.8 -14.3 2011 35837 2099 1672 27361 4704 10130 2830 1047 1986 398 1645 487 1128 464 145 301 46268 Ao 2012 34247 2292 1075 25921 4959 11047 3047 1011 2157 432 1624 716 1253 532 275 345 45639 Var. % -4.4 9.2 -35.7 -5.3 5.4 9.1 7.6 -3.5 8.6 8.6 -1.3 46.9 11.1 14.7 89.6 14.8 -1.4

1 / Including skins, leather and handicrafts, mainly 2 / Includes the sale of fuel and food to foreign vessels and repair of capital goods. Source: SUNAT

IMPORTANT MINING PROJECTS

Investment US$ Million
Antapaccay Antamina (Expansion) Toromocho 1,500 1,300 3,500

Production t Cu
160,000 175,000 275,000

Start-up Operation
dic-12 dic-12 nov-13

Constancia
Las Bambas Cerro Verde (Expansion) Quellaveco Total
Source: MINEM

1,500
5,200 4,400 3,300 20,700

80,000
315,000 272,000 225,000 1,502,000

jul-14
dic-14 jul-15 jul-16

PROJECTION FOR THE NEXT TWO YEARS

(US$ MILLION)

INVESTMENT Expansions New Projects in construction In Exploracin In Production Total

Source: MINEM

2013 1,322 5,245 1,000 2,000 9,567

2014 2,595 3,819 1,200 2,300 9,914

PROJECTION FOR THE NEXT TWO YEARS

INVESTMENT US$ MILLION
PROJECT PRODUCTION YEAR TOTAL EXECUTED IN EXECUTION

PROJECTION
2013 2014

EXPANSIONS

Cuajone Expansion Lagunas Norte Expansion Marcona Expansion Toquepala Expansion Bayovar Expansion Cerro Verde Expansion Inmaculada Toromocho Alpamarca-Rio Pallanga Invicta Constancia Las Bambas Marcobre (Mina Justa) Quellaveco Minas Conga (Stopped) Crespo

2013 2013 2013 2014 2014 2016 2013 2013 2013 2014 2014 2014 2015 2016 2014 2014

300 400 1,200 600 520 4,400 315 3,500 90 93 1,546 5,200 744 3,300 4,800 111

180 338 0 305 0 998 132 1,681 35 0 50 1,644 6 20 1,543 0

120 62 1,200 295 520 3,402 183 519 55 93 1,496 3,556 738 3,280 3,257 111

120 62 148 150 843 183 519 55 47 964 1,722 246 803 651 55 200 148 370 1,877

NEW PROJECTS IN CONSTRUCTION

47 191 1,833 246 796 651 55

NEW MINING PROJECTS IN PERU

PROJECT Los Calatos Caariaco COMPANY/ COUNTRY Minera Hampton/ Australia Caariaco Copper / Canada Minera AQM Copper/Canada Latin Resources/ Australia Exploraciones Collasuyo/Canada LOCATION Mariscal Nieto, Moquegua Ferrreafe, Lambayeque Huancarqui, Arequipa ncash Accha, Cusco Espinar, Cusco MAIN MINERAL Cu Cu INVESTMENT US$ MMS 2,200 1,599 START-UP 2018 Stand by ANNUAL PRODUCTION (t) 107,000 119,000 103,000 Cu 30,000 Oz/ Au 1.5 - 3.1 mlls. Tm 60,000 Zn, 40,000 Pb 60,000

Zafranal
Guadalupito Accha Quechua

Cu/Au
Fe Zn/Pb Cu

1,520
620 524 490

Stand by
2015 2015 2014

Compaa Minera Quechua/Japan

Source: IIMP

NEW MINING PROJECTS IN PERU

PROJECT Rondoni Ollachea Salmueras de Sechura Llama TY01 Cercana Cerro Ccopane COMPANY/ COUNTRY Compaa Minera Vichaycocha/Peru LOCATION Cayma, Hunuco Ollachea, Puno Sechura, Piura Huancano/ Humay, Ica Yarabamba, Arequipa Omacha, Cusco MAIN MINERAL Cu Au K INVESTMENT US$ MILLION 350 170 125 START-UP 2016 2014 In Study ANNUAL PRODUCTION (t) 50,000 117,000 Oz 250,000 In Study In Study In Study

Ca. Minera Kuri Kullu/Australia

Americas Potash/Canada Jintong Mining/ China Junefield Group/ China Minera Cuervo /Canad-Australia

Au
Cu Fe

In Study
In Study In Study

In Study
In Study In Study

Source: IIMP