A conservative presidential hopeful in Peru is vowing a major change in policy representing the key mining industry’s biggest fear: to revoke key exploration permits for idle projects and redistribute them.
The proposal is the bane of global mining corporations that operate in Peru since they increasingly battle for control of mineral-rich territory with informal actors. Companies condemn them as illegal miners, while small-scale diggers accuse them of hoarding land for decades without exploiting it.“Idle areas will revert to the state if they are not used by the formal mining industry,” said Rafael Lopez Aliaga, a former mayor of Lima known as “Porky.” The fact that Lopez Aliaga made those remarks at the annual CADE business forum, the country’s most exclusive gathering for local executives, will be a hard pill to swallow for the mining industry and suggests other candidates may follow suit.
Peru is the world’s No. 3 copper producer and a key producer of gold, silver and zinc.
In a post on X following his address, Lopez Aliaga doubled down on the proposal, calling the current state of affairs unfair.
“They don’t work, or allow work to happen,” he wrote. “This only happens in Peru.”
The worry that mineral rights could be revoked has been the industry’s biggest concern in private conversations, but seldom discussed publicly. If put in place, it could have a huge impact on Peru’s biggest industry and for major companies including Southern Copper Corp, MMG Ltd and First Quantum Minerals. Companies say some of their mineral concessions have been taken by illegal miners.
Lopez Aliaga is currently the front-runner in a splintered field of over 30 candidates, polling at around 10% support according to Ipsos. Peru will hold general elections in April, at a time when a historic surge in gold and copper prices has pushed hundreds of thousands of Peruvians to embrace informal small-scale mining, threatening the established industry.
The small-scale mining industry has in recent years become a political force of its own, pushing ministers out of their jobs and securing extensions in Congress for a controversial permit for informal diggers.
“There is an issue that particularly worries me,” said Carlos Galvez, a former president of Peru’s SNMPE mining chamber who was questioning Lopez Aliaga at the CADE stage. “And that is the great proximity of many illegal miners to your party.”
Lopez Aliaga, who heads the Popular Renovation party, slammed the comment as an “absolute lie” and “extremely serious slander.”
Other proposals by Lopez Aliaga include filing a $3 billion arbitration against Brookfield Asset Management, his longtime foe when he was mayor, over the operation of a toll road in Lima. He also proposed that ailing state-owned oil company Petroleos del Peru SA be put through a bankruptcy restructuring process.
Top candidate in Peru vows to revoke key mining industry rights