Ricardo Labó Vice Minister for Mining, Republic of Peru Peruvian mining strategies 1
Importance of mining sector 2016 Peru Mining Sector GDP (Real % Change) 3.90 % 21.2 % 1 Share of GDP 100 % 9.7 % 1 Share of exports value 100 % 64.7 % 2 Share of tax revenue 100 % 5.4 % Share of foreign direct investment 100% 22.0 % Worldwide ranking of mining production 2 nd Copper 2 nd Silver 2 nd Zinc 4 th Lead 4 th Molybdenum 6 th Gold 1/ Only metallic mining sector 2/ includes metals, nonmetals, metalworking, steel and jewelry products Source: -Central Reserve Bank of Peru BCRP -National Superintendence of Customs and Tax Administration - SUNAT -Private Investment Promotion Agency PROINVERSION 2
Results at 2016, Peru captured 6% of the global exploration budget 1. (Top exploration destination in Latin America). has a Mining Projects Portfolio over US$ 46 billion 3. produced 2.35 million FMT of copper 2. (2 nd worldwide copper producer). is the most attractive destination for mining investment in Latin America. (28 th in worldwide ranking) 4. Source : 1/ S&P Global Market Intelligence (March 2017) 2/ Statistics Bulletin as of December 2016 - MINEM. 3/ Bulletin of estimated project portfolio (January 2017- MINEM) 4/ Fraser Institute (February, 2017) 3
Vast geological potential yet to be explored A modern Mining Cadastral System that is safe, accessible and reliable At the national level, mining concessions take up to 14% of the national territory 1,2% are in mining activity 0,3% in exploration stage 0,9% in exploitation stage 12,8% are not reporting mining activity A modern Mining Cadastral System WEB URL: geocatmin.ingemmet.gob.pe Promotional video: https://www.youtube.com/watch?v=b_1cbwtl79e&in dex=1&list=ple3b7463fd92b8bae Source: Statistical Bulletin as of December 2016 - MINEM. 4
Our strategic actions 5
Integrated strategy We have a comprehensive strategy that will allow investments to be successfully completed from the technical, administrative and social points of view. Normative review Reduction of red-tape and processes Promote an adequate social environment Differentiated Intervention by project and joint solutions 6
Mining sector objectives to 2021 01 02 03 04 Promote new mining explorations Guarantee the feasibility of the mining projects portfolio Guarantee the continuity of current mining operations Implement a new mining formalization strategy Capture at least 8% of global exploration budget Secure a minimum of US$14 Bn on new projects development Increase copper production by 30% over 3 million MT of fine copper Formalize at least fifteen thousand miners 7
Exploration promotion Pre-published a new environmental regulation for exploration activities Closer relationship with investor and finding joint solutions Streamlining the VAT refund process for exploration investment 8
Social management and performance Created the Vice Ministry of Territorial Governance, under the Prime Minister office Coordinating with Ministry of Economics and Finance the prioritization of public investment projects by subnational governments Delivering of government promises Created the Social Advance Fund Better coordination with other institutions Working closer with investors on joint strategies Working closer with subnational governments 9
Other regulatory and process adjustments 01 02 03 04 PRIOR CONSULTATION: Predictable ENVIRONMENTAL LIABILITIES: The State takes an active role VAT REFUND: Streamlined process Not only in mining exploration but also in other mining stages or activities Coordination in the granting of mining and forest concessions 10
Our technological innovation actions 11
Mining innovation ecosystem Academia Universities, Institutes and Research Centers Government -MINEM -Produce SNMPE Private Companies Suppliers METS 12
Government s effort in promoting innovation Objetives: The Ministry of Production of Peru, through the National Innovation Program for Competitiveness and Productivity (Innóvate Perú) and the new Inter-American Development Bank loan, promotes and stimulates innovation. 1 2 3 Increase innovation in business production processes. Boost innovative entrepreneurship. Facilitate the absorption and adaptation of technologies for companies. 13
Government s achievements in promoting innovation INNOVATE provides non-reimbursable resources to entrepreneurs and companies for co-financing the implementation, validation and pilot deployment of their projects. Since 2007 more than S/. 500 million were injected into the innovation system more than 2,000 projects were financed more than 1,200 companies were impacted more than 280 entrepreneurship were boosted 43 projects from the mining sector (S/. 11.6 million) - 27 under implementation - 05 in final stage - 11 completed 14
Civil society s effort in promoting innovation (i) 2 nd HACKATÓN Hackatón It s a competition organized by the National Society of Mining, Oil and Energy (SNMPE) and ESAN University, in which students create high-impact technology solutions for energy and mining sector. Open Innovation applied to Peruvian energy and mining sector The event promotes research and innovative spirit among students, and promotes the development of entrepreneurial skills in a collaborative learning environment. 15
Hackatón s results The Hackatón's winners (top three places) receive accompaniment for three months at the Center for Entrepreneurial Development of the ESAN University, then carry out technical visits to energy and mining companies to validate their projects in the place, and finally, in a special session, present their projects to potential investors and companies associated with SNMPE. First stage Final round Results Hackatón 2016 204 Students 30 Universities 44 Teams 108 Students 24 Universities 24 Teams 24 Technical Solutions 4 Test phase Hackatón 2017 165 Students 21 Universities 36 Teams 116 Students 16 Universities 24 Teams 24 Technical Solutions 16
Hackatón s best projects Safety helmet with monitoring sensors Robot for heavy minerals detection Robot for objects identification System for cyanide detection in water 17
Civil society s effort in promoting innovation (ii) TICAR - Technology and Innovation Symposium It is a space for discussion and exchange of experiences, which annually gathers mining, hydrocarbons, electric and technology companies, and academics, in order to find opportunities for value creation, innovation and productivity improvement in energy and mining companies. VIII TICAR TECHNOLOGY AND INNOVATION SYMPOSIUM for Energy and Mining Sector In this event, both private companies and academia, present the development and implementation of their technical works as innovative products or services. The Technological Innovation Prize is awarded to the best projects. 5 th Technological Innovation Prize in Energy and Mining Sector 18
Technological Innovation Prize Drone for air quality measurement Robot for mineral exploration Mobile app for granulometric analysis System for the fatigue detection in vehicle drivers 19
Technology in the logistics chain The global trend of mining logistics chain focuses on the automation of operational processes. In this way, more efficient and safe operations are achieved to guarantee an adequate environmental, social and personal management at work. An example of this is the modernization of Callao's port, with the implementation of conveyor belts for the shipment of concentrates, robots for mineral sampling, automated wagons for ore unloading without human intervention, remote monitoring of the process, among others. 20
It s time to invest in Peru 21
Next projects We expect to attract the best investors of the world for: MICHIQUILLAY: Michiquillay is a mining project with ore estimated reserves of 1,159 Million MT at 0.63% Cu and 0.014% Mo. The estimated investment for the project is 1,950 US$ Million. We expect to adjudicate the project in a bidding process, which begins in August 2017. COLCA: Based in geophysics studies, Colca is a mining project with highly possibilities to find gold-copper porphyry. JALAOCA: Based on the geological characteristics, mineralogy and alterations, together with the geophysical anomalies, Jalaoca is a mining project that offers conditions to be explored by Copper, Gold and Molybdenum. 22
It is time to invest in Peru The Ministry of Energy and Mines has developed a user friendly application to access all the information you may need to assist you in making the decision to invest in mining and other production sectors of Peru. 23
Thank you 24