In January 2025, the mining project El Algarrobo was awarded to Compañía de Minas Buenaventura, with an estimated investment of USD 2.753 billion. This polymetallic deposit, located in Tambogrande (Piura), is expected to initially process 5,000 tons per day, with the potential to increase to 15,000 t/d, and has a projected operational life of 7 years.
However, current projections estimate that the permitting, construction, and commissioning phases may take up to 11 years—that’s 57% longer than the project's operating life. This raises a critical question: How can the development phase exceed the duration of the productive life?
Legal Timelines vs. Operational Reality
By law, mine development in Peru should take 5 to 7 years from advanced exploration to construction authorization. Yet in practice, it often extends to 10–12 years or more due to factors such as:
- Repetitive observations and slow approvals from public institutions (SENACE, MINEM, ANA, etc.).
- Prolonged prior consultation and social conflict processes.
- Overlapping rights (mining, agricultural, communal, or forestry).
- Political instability and limited State technical capacity.
These delays have direct financial consequences. A 5-year delay may result in over USD 220 million in additional capital costs—approximately 8% of the total CAPEX. This erodes profitability, complicates financing, and may even jeopardize project viability.
What's at Stake for Peru?
Metallic mining contributes 9% to 11% of Peru's GDP, depending on commodity prices. It is a key driver of tax revenue, employment, and regional development. Regulatory inefficiencies not only increase project costs but also postpone the social and economic benefits that these investments bring to communities and the nation.
What Needs to Change?
At DC&R, we believe Peru urgently needs:
✅ Streamlined, coordinated processes across government agencies
✅ Integrated territorial management to avoid land-use conflicts
✅ Informed and technically grounded public participation
✅ Specialized technical guidance throughout the investment lifecycle
With over 30 years of experience in high-demand engineering and construction environments such as mining, oil & gas, and infrastructure, DC&R supports investors through every phase of their industrial projects—from bid management to contract administration, always with a strategic and technically sound approach.
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