Peru background information

Minerals Summary

Mining in Peru goes back as far as the early 1500’s when the Spanish began mining silver. Currently, mineral deposits in Peru include gold (Peru is the largest producer in Latin America), silver, tin, copper, lead, zinc, coal, iron ore, natural gas and petroleum. Abundant mineral resources are found mainly in Peru’s mountainous areas. Mining makes up 6.5% of the GDP. The industry has been Peru’s major foreign exchange generator since 1997, accounting for approximately 61.8% ($14.7 billion) of total export revenues.

The Peruvian economy relies so heavily upon exports of naturally occurring resources that precautions must now be taken to insure that the use of the mining sector as a major source of foreign exchange and industrial growth will be sustainable and not lead to exploitation and degradation of the environment. The mining industry has been virtually unregulated for decades. As the government continues to invite foreign investment, there are some questions as to where the liability lies for past environmental abuses, and what plans will be put in place to ensure future behaviour is responsible and not environmentally damaging.

Foreign investment in Peru has resulted in the development of several world class deposits, including Yanacocha and Pierina Gold Mines, the massive Antamina copper-zinc mine, and Empresa Minera del Centro del Perú S.A. (Centromin).

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Peru (officially the Republic of Peru) covers 1,285,220 km², with 5,130 km2 of it being water. Located in Western South America, it neighbours Ecuador and Colombia to the north, Brazil to the east, Bolivia to the southeast, Chile to the south, and the Pacific Ocean to the west. Unlike other equatorial countries, Peru does not have an exclusively tropical climate; the influence of the Andes and the Humboldt Current cause great climatic diversity within the country, and so its geography varies from arid plains, to mountainous highlands, to tropical forests.

The Andes Mountains run parallel to the Pacific Ocean, dividing the country into three geographic regions:

  • The costa (coast), to the west, is a narrow plain, largely arid except for valleys created by seasonal rivers. This area has moderate temperatures, low precipitation, and high humidity, except for its warmer, wetter northern reaches.
  • The sierra (highlands) is the region of the Andes; it includes the Altiplano plateau as well as the highest peak of the country, the 6,768 m (22,205 ft) Huascarán. This area gets frequent rain in the summer, while the temperature and humidity diminish with altitude up to the frozen peaks of the Andes.
  • The third region is the selva (jungle), a wide expanse of flat terrain covered by the Amazon rainforest that extends east. Almost 60% of the country's area is located within this region (70 million hectares), giving Peru the fourth largest area of tropical forest in the world. The selva is characterized by heavy rainfall and high temperatures, except for its southernmost part, which has cold winters and seasonal rainfall.

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Peru has made great strides over the past decade in improving its infrastructure, but it is still lacking. The infrastructure gap is greatly hindering Peru’s development, by about $10,495 billion according to the Ministry of Economy.


Of the 72,887 kilometres of roads, 8,698 kilometres are paved.

The principal roads are the Pan-American Highway, which runs the length of the country down the coast; the Central Highway, which connects the capital, Lima, to the Andean highlands; and the Marginal Highway, which penetrates deep into the north-eastern jungle region.

Since the 90’s, the number of vehicles more than doubled in Peru, leading to much higher transportation-related deaths. In 2000, an average of 3 people died each day.

Rail transport

Rail transport in Peru has never consisted of a true network, primarily comprising separate lines running inland from the coast.

Much work has been started, and then abandoned due to difficult and mountainous terrain.

Regular passenger traffic now operates over only a small portion of the mileage.

The nation's rail system, which was privatized in 2000, services highland mining operations.


Peru has 234 airports, most of which are simple airfields, serving private planes.

Of the 234, only 44 have paved runways.

The largest is the Jorge Chavez International Airport, located in Lima. It was privatized in February 2001.

Water ports

The largest port facility is in Callao, the port city adjacent to Lima.

In addition to Pacific Ocean ports, the country also has 3 large river ports: Iquitos, Pucallpa, and Yurimaguas. Iquitos is located on the    Amazon River, while the other 2 ports are located on major tributaries.

Peru has 8,598 kilometres of navigable river ways. Lake Titicaca, located on the border with Bolivia, is the world's highest navigable lake.

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Water supply

Despite advances (increase of water access from 30% to 62%, sanitation access from 9% to 30%), the Public water system in Peru is still in dire need of re-organization. Of the estimated 29 million people in Peru, approximately 6.4 million have no access to water services whatsoever, and 11.3 million have no access to sanitation services. Both rural and urban areas have, on average, the same percentage of water access. In terms of sanitation, rural areas have only about 32% coverage, which in turn leads to a very high risk of infectious waterborne and water contact diseases such as hepatitis A, typhoid fever, and leptospirosis.

Community conflicts sometimes break out when extractive sector companies use water resources without authorization from locals.

Social Inequities/Political Crisis

Peru’s rapid economic expansion has helped to reduce the national poverty rate by almost 15%, but 44.5% of the population still live below the poverty line. Not all Peruvians share the benefits of the country’s growth, general disregard from the government and lack of infrastructure inhibit growth in Peru’s less developed regions.

In terms of mining, there are mixed feelings from smaller local communities. New companies are welcome as far as the economy goes, but rural communities are much more hesitant mostly due to past environmental damage and accidents from mining companies that have not all been accounted for. Corrupt local governments mean that most of the profit turned from huge mining companies is spent unfairly, leaving the poor, still poor. There are occasional protests and blockades from locals claiming big mining companies are demolishing historical monuments, polluting rivers and streams that provide clean drinking water, and destroying the environment.

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Ancient Peru was home to several prominent civilizations, most memorably, the Inca Empire. The Spanish conquistadors overthrew the Empire in 1533 and established a Viceroyalty, made up mostly of its South American colonies. Peru achieved its independence in 1821, defeating the remaining Spanish forces in the 3 years that followed. After years of military rule, Peru returned to democratic leadership in 1980, but experienced extensive economic crisis, waves of drug trafficking, and massive political violence. Internal conflict in Peru is ongoing, though it has greatly decreased since 2000. Having begun in the 80’s, the war between the Peruvian government, the Tùpac Amaru Revolutionary Movement (MRTA), and the Shining Path (Maoist political group) has claimed approximately 70,000 lives, most of them innocent civilians. The MRTA has since been dismantled, and the Shining Path has all but disappeared since the capture of one of its leaders, Abimael Guzman.

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Peru is a presidential representative democratic republic with a multi-party system, run by President Alan Garcia Perez, who is both the chief of state and head of government since July 28, 2006.

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Peruvian economy has been slowly but continuously growing in the past few years. It grew by more than 4% per year in the 2002-2006 time period, and again up to 9% per year between 2007-2008. This relatively fast improvement has helped decrease the national poverty by about 15% since 2002, but underemployment and inflation are still high.

Peru’s economy is considered an ‘Emerging Market’ due mostly to macroeconomic stability, an increase in investments, and improved terms of trade (Peru recently signed a free trade agreement with Canada). Despite its rapid economic growth, most of Peru’s wealth is unevenly distributed and 44.5% of the population lives below the poverty line.

Peru’s main exports are copper, gold, zinc, textiles, and fish meal.

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