Kuczynski Seeks to Reduce Peru Mine Project Delays, Adviser Says

  • Proposals seek to reduce delays on up to 20 projects
  • Mining investment is forecast to drop 31 percent this year

Peruvian presidential candidate Pedro Pablo Kuczynski would reduce red tape and take steps to placate community opposition holding up $22 billion of mining investment as part of plans to boost growth if he’s elected, his top economic adviser said.

Easing regulation and bureaucracy will make the projects more attractive to companies while investing in public works in areas where the mines are to be built will help reduce local opposition, Alfredo Thorne said in an interview in Lima. 

Local delays and falling metal prices have led companies to curtail mine investment in Peru in the last two years, damping economic growth in the world’s third-largest copper and zinc producer. Kuczynski’s proposals will allow as many as 20 mining projects to move forward to construction, Thorne said.

“What you need to do is generate goodwill both at the level of investors and the population at large,” he said.

Investment, Growth

Mining investment will fall 31 percent in 2016, according to the central bank. Still, rising copper output from mines built during the commodities boom will fuel 4 percent growth this year, up from 3.3 percent in 2015, according to the Finance Ministry.

If elected, Kuczynski plans a temporary fiscal stimulus financed by debt and government savings. Structural reforms to Peru’s labor market, tax system and public administration will sustain 5 percent annual growth in the medium term, Thorne said.

Kuczynski has said he’ll name Thorne finance minister if he wins the June 5 runoff against Keiko Fujimori. Thorne founded research and advisory firm Thorne & Associates in 2011 after previously serving as head of investment banking at Banorte-Ixe in Mexico and overseeing Latin American research at JPMorgan Chase & Co.

The two candidates are in a statistical tie, according to a Datum poll published by Lima-based Peru21 newspaper on Friday. Kuczynski had 41.1 percent support while Fujimori had 40.4 percent in a April 15-18 survey of 1,200 people. The poll has a margin of error of plus or minus 2.8 percent.