What are the objectives of the 12th Congress of Prospectors and Explorers (proEXPLO 2021) organized by the Peruvian Institute of Mining Engineers (IIMP)?

The objective of proEXPLO 2021 is to promote mining prospecting and exploration in Peru, Latin America and the world.

The event will also seek to highlight the importance of this activity for the Peruvian and global economy; as well as to know the perspectives of this activity for the next 2, 3, 5 and 10 years.

In addition, proEXPLO will be a platform for different stakeholders to discuss, get informed, exchange opinions and learn from this economic activity that is important for Peru and the world.

What do you consider will be the contribution of proEXPLO 2021 to Peruvian mining?

First of all, I think we need to promote the importance of mining for Peru's economic development and for reducing the poverty rate in the country, which is now around 25% due to the COVID-19 pandemic.

It should also be noted that Peru has a competitive advantage over other countries, and has a geological potential for resources and reserves of gold, copper, zinc, tin and other metals.

And it turns out that the global trend is towards environmentally friendly energy. That means that the demand for electric cars will increase significantly in the next 20 years. Today, electric car sales represent 3% of total new car sales in the world. This is expected to be 25% in 2030 and 55% in 2050. And each electric car demands 3-4 times more copper than a gasoline car. Therefore, since demand will rise significantly and supply is stagnant, it is very likely that the price of copper will explode sometime in the next decade.

So, if Peru produces 12.5% of the world's copper and has potential resources and copper reserves, it is quite obvious, as young people say, that we have to take advantage of this situation to exploit our resources and sell them, so that Peru's GDP grows, formal employment grows, taxes are collected, schools, hospitals and roads are built, and people are lifted out of poverty. It would be foolish to leave our mining resources in the ground and not take advantage of this great opportunity that the global market gives us.

In this sense, achieving these objectives requires policies that encourage investment in mining and in exploration and mining prospecting; always respecting the rules of the game: caring for the environment, paying taxes, reaching agreements with local communities that may be affected by a mine near their homes.

What do you think about the opinion expressed by former Minem at the Congress on Mining Competitiveness and Social Sustainability: that his administration would focus on promoting mining exploration?

I think it's a good idea and that's what has to be done. Without mining exploration and prospecting there will be no resources and without them there will be no exploitation. What good is it for us to have great geological potential if our assets are not going to be sold? What is the use of having competitive advantages if we are not going to take advantage of them? We need to reduce poverty and create a formal country, with educated people who respect authority and others, and with solid institutions. And in my opinion, the most efficient way to do this is to take advantage of the mining boom that will occur in the world in the coming years for the reasons already mentioned.

The challenge is to convince those people who don't know about the subject, who are the majority. Therefore, we have to make sure that people understand that we have to mine the resources from the ground and sell them so that our country will have more wealth, more work, less poverty. I reiterate, we have that great competitive advantage of copper, gold and zinc.

How can we convince people?

Since there is a high percentage of people who do not believe that mining is important or even hinders the activity, more action is required from the government and the private sector. Promoting more congresses like proExplo is one way.

Similarly, it is essential to talk to local communities. In that line, the government has to actively participate and mining companies have to compensate the communities if economic externalities arise. People are not irrational and if there are benefits for everyone, they will accept and even promote it.

How does Kallpa SAB foresee the behavior of junior mining companies and financing in 2021?

Mining is a very particular industry because the main variable that drives the expected return for companies is the price of metal. The price of gold, copper and zinc is quoted on the financial markets. Being a commodity, companies have to seek efficiency, reduce their costs, be competitive and seek to invest in exploration to increase reserves in a sustained manner.

The financial markets are more important now than they were 30 years ago. It is investors around the world that provide capital to mining companies through the purchase of bonds and/or shares. Let us remember that 30 years ago it was the owner of the company who gave the money; but now there are millions of owners, who through stockbrokers or investment funds buy shares/bonds of mining companies and thus provide capital to mining companies for their investments.

In this context, financing will depend on the perspectives that investors have about the price of metals, the level of management of companies, the friendliness of the country where projects are located to private investment, tax issues, relations with local communities, respect for the environment, among others.

Therefore, the policies dictated by the government and the congress are fundamental to move forward or backward.

Is there a positive outlook for more companies to come to Peru?

In general, there is a positive outlook and it will be maintained or improved as long as there are no significant changes to the economic model that has prevailed for 30 years. In the last 10 years, Peru has doubled its copper production. This is due to the trust investors have in Peru and the implementation of projects such as Las Bambas, Constancia, Mina Justa, Quellaveco and Toromocho, among others. Although it is true that large projects have been frustrated, such as Conga or Tía María, we have made progress. I consider it unacceptable that Conga is not being developed because Cajamarca has a very high level of poverty. If the project implementation is going to generate economic externalities to the affected communities, then they should be paid and we should move forward.

Now, obviously we must improve. Improvement would bring more investment, more formal employment, more taxes for the treasury, more schools, more hospitals, less poverty.

The Government should be much more proactive in attracting private investment to the sector and ensure that this investment is carried out efficiently by solving the problems that may arise with communities and by solving the bureaucratic problems that exist to move projects forward. On the political side, we need more stability. Definitely having three presidents in five years does not help.

Also, recently the acquisitions of junior mining company projects have been announced. At these prices, mining companies are cashing in and as they know they have to invest in mining exploration to produce sustainably, they tend to buy. If this continues, we should not be surprised if there are more purchases of mining exploration companies.

What takeaway do you want participants to take home at the end of proEXPLO 2021?

There are three key takeaways. The first is to understand that Peru is fortunate to be the second largest copper producer in the world in a market where a copper price boom is expected in the coming decades. The world will be looking for energy that is environmentally friendly and cars, ships and planes will be electric. Again, it takes 3 times more copper than a gasoline car to produce an electric car. The demand for copper will explode, and Peru has copper. We have to take advantage of the situation.

Second, in order to do this and reduce poverty we must invest in mining exploration and prospecting and then exploit these resources.

Third. In this context, we have to prepare ourselves for this. We must plan. We need to make a policy that allows us to develop our mining potential in an orderly manner, that complies with environmental regulations, that pays for the externalities that may arise, among others. We cannot live with our backs to the world. The world is extending a hand to us. It would be foolish not to accept that hand that will help us to significantly reduce poverty in Peru.