Mining in Peru: Benefiting from Natural Resources and Preventing the Resource Curse

Peru is one of the world’s top producers of copper, gold and silver. While the mining sector contributes significantly to the economy, some reports suggest that mining activities have, in some cases, have had a negative impact on the environment and communities. The Capstone team's goal was to identify how Peru can maximize the potential of its mining sector while still avoiding the 'resource curse'. The team developed an optimum framework, which included (1) strategies to manage the legal, social, cultural and environmental footprints of mining, and (2) measures to mitigate its negative consequences. 

To achieve these goals, the Capstone team connected with relevant stakeholders during their fieldwork in Peru mid-semester. To understand the legal and regulatory framework, the students engaged the Government of Peru to discuss the mining agreements in place, investment treaties, and local laws. In identifying weaknesses or gaps in the law, the team was cognizant of the social and environmental impact of mining and transparency in mining transactions. To better grasp the complexities of the industry and understand the perspectives of stakeholders on the ground, the team visited three copper mines: (1) Cerro Verde (Arequipa), the country’s third largest copper mine, (2) Tintaya (Cusco), which is about to close, and (3) Antapaccay, (Cusco), which is relatively new. These visits allowed the team to understand the impact of mining on the social, economic and environmental fabric of communities. The team produced a report that inlcuded their observations and provided concrete recommendations that blended innovation with cautious optimism, and which can be implemented effectively. In producing the report, the team hoped to serve as the basis for the Government to enhance its capacity to translate its riches in the mining sector into sustainable and inclusive growth.