Meeting IV: Social Profitability and Peruvian Mining

The National Society of Mining, Petroleum and Energy (SNMPE) organized the fourth meeting “On the Road to the Gold, Silver and Copper Symposium” under the title “Social Profitability and Peruvian Mining”. With the presence of the Minister of Energy and Mines, Iván Merino, the virtual forum served to discuss this concept, which the Government has announced as a State policy.

In his presentation, the Minister stated that social profitability “imply several points”, such as the invigoration of the economy, infrastructure works, the use of new technologies, respect to cultures, care of the environment and a territorial approach.

He also indicated that the country has real advantages for the development of mining, since it has accurate geological information, a centuries-old mining tradition, a State that promotes this activity and rich mineral deposits. “Our raison d’être is to promote mining, with stable and clear rules,” he said.

In turn, Magaly Bardales, president of the Mining Sector of the SNMPE, assured that social profitability “are already part of the performance of formal mining companies”, and that this is applied “throughout the development of their operations”.

She stressed that social profitability must be conceived “as an interrelation and joint action between different players [the State, private companies and the population] according to their specific roles”.

She also pointed out that this is an opportunity to improve the use of the canon and royalties to close the country’s gaps. “As a business association, we presented many proposals to the Government and we are available to articulate efforts that generate greater value for Public Administration,” she mentioned.

Social profitability as a policy and the culture of the operations

Bardales highlighted that, in the last decade, the national mining sector has represented 16% of the private investment implemented in the country and has contributed 20% of total taxes collected by the State, besides generating almost 2 million jobs and increasing the value of the sector’s production in 40%, by means of its purchases from suppliers it also boosted the country’s local economies.

“We create formal employment; we operate with high standards of safety and environmental management; we contribute significantly to tax revenues, thus generating a significant economic contribution that provides development opportunities; and we behave in complete respect to human rights,” he said.

In her presentation, she indicated that private investment is key to generating social profitability, which is why the country’s mining project portfolio of around US$ 60 billion, which includes the development of 47 projects that will help to narrow the country’s social gaps, should be highlighted.

In turn, Eleonora León, former director of the Social Management Office of MINEM, pointed out that it is important to discuss this concept and that it is necessary to do so to achieve predictability in mining investments, highlighted the role of the Ministry of Energy and Mines to lead the industry with a multi-stakeholder approach and to follow the best practices and global standards in mining.

Meanwhile, the former Minister of Finance, Luis Miguel Castilla, stated that there are several challenges, including a clear definition of the concept and the role of each stakeholder, including regional governments. “Today [mineros] projects are profitable privately and socially,” he assured; therefore, it is necessary to build on what has already been gained. We cannot ignore it.

He also indicated that we are in need of generating an economic reactivation for the country, which generates employment, foreign exchange and wellbeing, for which predictability and stability in the rules of the game are required.

Finally, Bettina Woll, UNDP representative in Peru, expressed that it is important to embrace Agenda 2030 and the Sustainable Development Goals as the roadmap for a balance between economic, social and environmental progress, especially taking into account that these are territories lacking full basic services, such as education and health. “This cannot be achieved in isolation, but with all the country’s stakeholders [State, companies and communities]”, she mentioned.

Moderator