As Production Increases, Peru Becomes World’s Second Largest Copper Exporter

As companies like Compania de Minas Buenaventura S.A. (Lima Stock Exchange:BVN) and Minsur S.A. (Lima Stock Exchange: MINSURI1) boost output, Peru has become the world’s second largest exporter of copper, according to data from the country’s National Mining, Oil, and Energy Society (SNMPE). After producing 1.27 million metric tons of the metal in 2009, Peru displaced the U.S. and now stand second only to its neighbor to the south, Chile, when it comes to copper exports.

Hans Flury, Chairman of the SNMPE, told reporters “Peru, after Chile, is the second [most important] producer of copper in the world, and we hope that we’ll be able to maintain [this position].” Peru is already the world’s largest exporter of copper, second largest producer of zinc, and third largest producer of lead.

Despite the slowdown in the world economy, investments in the mining sector, and revenues from export receipts helped Peru’s economy bounce back in 2009. The country’s central bank has estimated that Peru’s economy will grow by 5.5% in 2010, boosted no doubt, by high levels of precious metals exports.

Data from the SNMPE shows that mining companies invested US$2.2 billion dollars in projects in 2009, an investment which helped boost export receipts for metals to US$16 billion for the year.

In a recent report, Moody’s Investors Service said Peru appears “poised to grow the most and maybe surprise on the upside.” Mario Guerrero, an analyst at Scotiabank Peru S.A. (Lima Stock Exchange: SCOTIAC1) in Lima, Peru’s capital, recently told reporters that “Peru is going to post strong growth this year and … attract… investment from abroad.”

Boosted by precious metals exports, Peru should serve as a reminder to investors that all that glitters may not be gold. After all, some of Peru’s luster comes from copper and silver.