Chinese investment in Peru is quite large. According to Chinese Ambassador in Peru, Song Yang, there are around 200 companies from his country that have invested 30 billion dollars in Peru . This represents around 32% of the 117.8 billion dollars of stock of foreign direct investment in Peru at the end of 2021 . According to another source, Peru is the second largest destination for Chinese investment in Latin America, with an amount of 28.2 billion dollars invested in the period 2005-2002, the first being Brazil with 76.2 billion dollars invested in that period . Most of the Chinese investment in Peru is in the mining sector. Peru is a country rich in natural resources, mainly in the mining sector. In 2021 Peru ranked as the second biggest producer of copper and zinc in the world, the third in silver and tin, and the fourth in lead and molybdenum (and the ten in gold) . The mining sector contributes with 8.5% to the Peru´s Gross Domestic Product .

1. Risks faced by Chinese companies and Peru political situation.
Maria Osterloh1
*
Chinese investment in Peru is quite large. According to Chinese Ambassador in Peru,
Song Yang, there are around 200 companies from his country that have invested 30 billion
dollars in Peru2
. This represents around 32% of the 117.8 billion dollars of stock of
foreign direct investment in Peru at the end of 20213
. According to another source, Peru
is the second largest destination for Chinese investment in Latin America, with an amount
of 28.2 billion dollars invested in the period 2005-2002, the first being Brazil with 76.2
billion dollars invested in that period4
.
Most of the Chinese investment in Peru is in the mining sector. Peru is a country rich in
natural resources, mainly in the mining sector. In 2021 Peru ranked as the second biggest
producer of copper and zinc in the world, the third in silver and tin, and the fourth in lead
and molybdenum (and the ten in gold)5
. The mining sector contributes with 8.5% to the
Peru´s Gross Domestic Product6
.
Peru is facing now a difficult political and social situation. Last year, President Pedro
Castillo, who assumed office in July 2021, was removed by the Congress on December
7, 2022, after he attempted a coup d’état. His removal, the naming of Vice president Dina
Boluarte as his replacement, and Boluarte´s intent to stay until July 2026, the time of
period which Castillo would have completed his mandate, originated social protests. For
most of Peru´s population the Congress and the government are all inefficient, corrupt,
and should gone now and there should be new elections.
The social protests calling for new elections have originated the blocking of roads and
strikes and have also disrupted production in some areas. One of the most affected have
been some mining operations, and specially of a big Chinese company that operate Las
1
Member of Centre for Asian Studies, San Marcos National University
2
In a speech given by Ambassador of China to Peru, 25th
November 2022:
https://mp.weixin.qq.com/s/L-dRV22hnlHwPA1q9npp3w
3
See Annex Table 2 of UNCTAD: World Investment Report 2022, page 216
https://unctad.org/system/files/official-document/wir2022_en.pdf
4
Derek Scissors, 2023: “Zero COVID” Ends, and Chinese Investment Returns, January 2023
https://www.aei.org/research-products/report/2023-zero-covid-ends-and-chinese-investment-returns/
5
See Central Reserve Bank of Peru Annual Report 2021 https://www.bcrp.gob.pe/eng-
docs/Publications/Annual-Reports/2021/annual-report-2021.pdf
6
See Peru Central Bank: Resumen Informativo Semanal February 16, 2023 page 1
https://www.bcrp.gob.pe/docs/Publicaciones/Nota-Semanal/2023/resumen-informativo-2023-02-
16.pdf

2. Bambas, a copper mine. The acquisition of Las Bambas by a consortium of Chinese
companies leaded by MMG Limited, represented the biggest Chinese investment in Peru.
In 2014 it paid 7 billion dollars for the operation7
.
Las Bambas output represent 2% of world copper production and accounts for 1% of
Peru´s gross domestic product8
. Also, Las Bambas production represent around 10% of
Peru total copper production. Additionally, its importance for Peru´s economy can be
seen in the fact that last year 2022 Las Bambas exported around 1.98 billion dollars,
becoming the sixth biggest earner of foreign currency for the country (Shougang, another
Chinese company producing iron ore, was the seventh biggest exporter, with 1.63 billion
dollars)9
.
There are also other Chinese companies that have problems with local communities in
Peru that protest that those companies activities will damage the environment or their
livelihood. These includes the Hidrovia Amazonica (Amazonian Waterway), where the
company Sinohydro Corporation Limited participates. Its operation has stopped since
201910
. The other case is of a copper mine project in the north of Peru, Rio Blanco, that
was bought by a Chinese company Zijin Mining Group Limited in 2007 but also is
paralyzed by opposition from the local communities11
.
But actually, the case of Las Bambas copper mine is the most clear example of how
conflicts with local communities are not the only problem affecting operations but also
the country political situation. Here a brief discussion about the conflict in Las Bambas
is presented and an overview of Peru political situation with its impact in economic
activities is given.
Las Bambas´s conflict with peasant communities
7
See Reuters: Glencore reaps 7 billion from Las Bambas mine sale to China´s MMG, July 31, 2014
https://www.reuters.com/article/uk-glencore-mmg-lasbambas-idUKKBN0G12XN20140801
8
See Reuters, June 2, 2022: https://www.reuters.com/world/americas/peru-cabinet-seeks-solution-las-
bambas-crisis-leftists-urge-nationalization-2022-06-03/
9
Peru Ministry of Foreign Trade and Tourism, Trade Monthly Report, December 2022, page 10
https://cdn.www.gob.pe/uploads/document/file/4090459/RMC%20Diciembre%202022.pdf?v=1675959
528
10
Environmental Justice Atlas: https://ejatlas.org/conflict/hidrovia-amazonica
11
OXFAM: https://www.oxfamamerica.org/explore/stories/rio-blanco-history-of-a-mismatch-in-peru/

3. Las Bambas mine is in the Apurimac Region in the south of Peru. It depends on the South
Mining Corridor (See Map 2), a national road that ends in the port of Matarani, to export
its production as well as to bring materials for its operations.
Since it began its extractive process in 2016, it has had problems with the peasant
communities along the Mining Corridor.
Map 1: Map of Peru (left) and Map of Communities around Las Bambas Mine and the
South Mining Corridor (right)
Source: Map on the left: https://www.tripsavvy.com/maps-of-peru-1619938, Map on the right: Las Bambas
https://elaportedelasbambas.pe/home-sobre-las-bambas-comunidades-locales-mapa-de-comunidades.html
The problem is that in 2011 when Glencore owned Las Bambas and another copper mine
“Tintaya”, there was a project to transport the production of Las Bambas to Tintaya,
where there was a mineral concentrator plant, through a pipeline. But when Las Bambas
was sold to MMG, this company built its own concentrator plant, and it has no need to
build that pipeline. Instead it began using a road to transport the mineral by trucks and
then by railway to the port of Matarani in the Coast.
If the pipeline would have been built, around twenty communities along it would have
benefited by being paid by the company for the right of using part of their land for the

4. pipeline. But even if there is no pipeline, they want to receive payment for use by Las
Bambas of the road that go through its land. But they do not receive any payment because
the government in 2016 declared that road part of a national road (The South mining
corridor). Besides that, the communities complain that as the road is not asphalted, the
trucks when passing produce dust that cause damage to their farms and livelihood12
.
Map 2: of Peasant Communities Around The South Mining Corridor and trajectory of the
southern mining corridor
Source: La Republica Daily https://larepublica.pe/sociedad/2019/10/13/38-comunidades-soportan-paso-
de-camiones-mineros-arequipa-apurimac-cusco-lrsd
12
For a detailed explanation of the problem see Cruz, E. (April, 2022). Las Bambas: Conflicto
anti-minero o lucha por ser re-incluidos. Rumbo Minero. Retreived from
https://www.rumbominero.com/peru/las-bambas-conflicto-anti-minero-o-lucha-por-
ser-re-
incluidos/#:~:text=En%20el%202016%20Las%20Bambas,v%C3%ADa%20llamada%20Co
rredor%20Minero%20Sur.

5. As it can be seen in the following figure, since la Bambas started operations in 2016 it
has encountered social protests and blocking of roads that have caused a negative impact
in its production.
Graph 1: Las Bambas Mine Days of blockages (in the left) and their impact on annual
production since its start of operations (on the right, in fine metric tons)
Source: author’s elaboration with data from the Ministry of Energy and Mines of Peru; Energiminas
magazine; Las Bambas Mining company website
Political turmoil protests
Besides problems with the local communities, Peru political situation has an impact also
in economic activities of companies like Las Bambas. As was said before, the ousting of
President Pedro Castillo and the discredit of the National Congress have ignited social
protests asking for general elections. If there is new elections a time of uncertainty will
follow as it is not know which kind of government will be elected. Peru has no stable
political system and established political parties, and in the last 30 years, from 1990, the
ones which won the elections were most new parties formed just before elections.
Political instability has been especially manifest in the last five years, when 6 Presidents
have occupied office, due to infighting between the Executive and National Congress.
This infighting is also the reason why still there is no agreement on when a new election
will happen, even if most of the Peru population want that.

6. The problem is compounded by the fact that leftist groups also ask for elections for a
constituent assembly to elaborate a new Constitution, to replace the one of 1993. The
danger is that this could mean a change in the economic rules that govern Peru now, in
which there is a free market economy with a minor state presence. Leftist groups want to
increase the state presence in the economy, even that the State regulate foreign investment
and it could own companies exploiting natural resources (or that the state could have the
monopoly in this economic activity).
Given this situation, is probably that now and in the following months political instability
and social protests would continue. If a date for elections is decided, the uncertainty about
which economic policies would be adopted will last until a new government is elected.
But if there is an agreement to elect a constituent assembly to prepare for a new
Constitution, the uncertainty will last more.
22 de febrero del 2023

7. Annex:
Economic importance of Las Bambas:
A) Importance in the national production of copper and molybdenum:
In 2022, Las Bambas ranked as the fourth largest producer of copper
representing 10% share in the national production of this mineral. So far, of
the three Chinese mining companies that produces copper, Las Bambas is the
largest producer, keeping this position since it began operations as it can be
seen in the next graph. Furthermore, in 2015 national production of copper
amounted for 1,700,817 tons, but when Las Bambas started operations in
2016, its production added 329,368 tons to national production. This, together
with Minera Chinalco production of copper, added half million tons of copper
to Peru’s production of this mineral.
Graph: Chinese Mining Companies in Peru: Copper Production (Fine Metric
Tons), 2014 – 2022

8. Source: Elaboration of the author with data from the Ministry of Energy and Mines of Peru
In the case of molybdenum, Las Bambas ranked as the third largest producer
of this ore in Peru with a share of 11% of the total production.
Graph: Chinese Mining Companies in Peru: Molybdenum Production (Fine
Metric Tons), 2014 – 2022
Source: Elaboration of the author with data from the Ministry of Energy and Mines of Peru
B) Importance on Peru’s foreign trade:
Las Bambas ranked in 2022 as the fifth largest exporter of the mining sector.
Its main markets were China with a share of 79%; South Korea with 10%;
Chile with 5% and Japan with 4%.
Las Bambas exports to the world accounted for 3% of the total amount
exported by Peru in 2022. Moreover, Las Bambas export amount represented
1% of Peru’s GDP in 2021.
Finally, Las Bambas is very important for the communities around its
influence area and at the regional level. In 2022, its exports represented 98%
of total exports of the Apurimac region.
C) Importance on Peru’s foreign direct investment:
As mentioned before, Las Bambas mine project was purchased by the
Consortium MMG Ltd. The payment of this transaction became the largest
investment amount made by a foreign company in Peru.

9. Besides that, according to the embassy of the PRC in Peru, the total amount
invested by Chinese companies in Peru since they arrived in the 1990’s was
of 30 billion dollars so Las Bambas acquisition represented 23% of the total
invested by Chinese companies. Peru is the second largest receiver of Chinese
investment in South America after Brazil.
Moreover, Las Bambas annual investments in its plant, equipment,
infrastructure, etc. accounted for 219 million dollars in 2022 representing 4%
share of the total invested by mining companies in Peru.
And in its area of influence, in the Apurimac region this amount represented
90% share of the total invested in mining.
D) Importance in the mining sector employment:
In 2022, the average of workers hired in the mining sector in Peru accounted for
230,737 people. Of the total mining workers hired in 2022, Las Bambas hired
workers represented 1%. At first glance this may be seem little but this mine
represented 32% of the total mining workers hired in the region that operates as
can be seen in the next figure. Besides, of the three Chinese mining companies
that have active mine operations in the country, Las Bambas is the one that
contributes more with employment.
Graph: Average number of workers hired in the mining sector by region and by Chinese
mining companies in Peru in 2022

10. References
Cruz, E. (April, 2022). Las Bambas: Conflicto anti-minero o lucha por ser re-incluidos. Rumbo
Minero. Retreived from https://www.rumbominero.com/peru/las-bambas-conflicto-anti-minero-
o-lucha-por-ser-re-
incluidos/#:~:text=En%20el%202016%20Las%20Bambas,v%C3%ADa%20llamada%20Corred
or%20Minero%20Sur.
Ayuda a memoria 2023. Provias Nacional. Recuperado de
https://cms.pvn.gob.pe:10443/PortalWeb8UIT/Forms/frmAyudaMemoria_Ext.aspx
Banco Central de Reserva del Perú (BCRP). (2014 – 2021). BCRP Data. Cotizaciones
internacionales. Recuperado de
https://estadisticas.bcrp.gob.pe/estadisticas/series/mensuales/cotizaciones-de-productos-
promedio-del-periodo
Banco Central de Reserva del Perú (BCRP). (2014 – 2021). BCRP Data. Producto Bruto Interno
Trimestral. Recuperado de
https://estadisticas.bcrp.gob.pe/estadisticas/series/trimestrales/resultados/PN02635BQ/html
Chauvin, L. (12 de marzo de 2022). China's MMG races for deal to protect copper flow from Peru
mine. Nikkei Asia. Recuperado de https://asia.nikkei.com/Business/Materials/China-s-MMG-
races-for-deal-to-protect-copper-flow-from-Peru-mine
China's MMG secures supplies to continue copper production in Peru. (10 de febrero de 2023).
Nikkei Asia. Recuperado de https://asia.nikkei.com/Business/Markets/Commodities/China-s-
MMG-secures-supplies-to-continue-copper-production-in-Peru
Cruz, E. (27 de setiembre de 2022). Las Bambas ha pagado más de S/ 6,389 millones en impuestos
y regalías. Rumbo Minero. Recuperado de
https://www.rumbominero.com/peru/noticias/mineria/las-bambas-impuestos-y-regalias/
Las Bambas ha tenido que soportar exactamente 321 días de bloqueos de vías entre 2016 a la
fecha. (16 de marzo del 2021). Energiminas. Recuperado de https://energiminas.com/las-bambas-
ha-tenido-que-soportar-exactamente-321-dias-de-bloqueos-de-vias-entre-2016-a-la-fecha/
Las Bambas perdió más de año y medio de producción desde su inicio de operaciones en 2016.
(28 de diciembre del 2022). Proactivo. Recuperado de https://proactivo.com.pe/las-bambas-
perdio-mas-de-ano-y-medio-de-produccion-desde-su-inicio-de-operaciones-en-2016/
Ministerio de Energía y Minas del Perú (MINEM). Compendio de estadística de producción
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https://www.minem.gob.pe/_estadistica.php?idSector=1&idEstadistica=13494

11. Por bloqueos, Minera Las Bambas inicia reducción de operaciones (03 de noviembre de 2022).
Las Bambas. Recuperado de https://www.lasbambas.com/notas-de-prensa/por-bloqueos-minera-
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PromPeruStat. (2014 – 2022). Ranking de exportaciones por países. Recuperado de
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2023). Proactivo. Recuperado de https://proactivo.com.pe/sector-minero-cerro-el-2022-con-mas-
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