2570 COPPER IN PERU: A 55-YEAR REVIEW Jorge R. Falla Co-ordinator, Grupo de Diálogo Minería & Desarrollo Sostenible ABSTRACT Exceptionally well-endowed with natural resources, Peru has experienced a number of commoditydriven, boom and bust cycles: guano and saltpetre, oil, rubber, copper, fishmeal, gold, etc. over the course of its history. Being an industrial mineral, copper is not a store of value and safe haven in turbulent times, like gold, whose fortunes are driven by investor sentiment; copper prices are tied to industrial activity, economic trends and innovation, across diverse economic cycles, often out-performing traditional assets like stocks and bonds. Peru is one of the leading copper producers and exporters, holding no less than 10% of global copper reserves, given its importance for the country time is due to have a look, with the advantage of hindsight, at what has happened over this period, both, in the country and to its copper mining industry. 1. A TALE OF THREE GENERATIONS The export-led growth model, re-introduced in the 1950s, after an ill-fated populist experience, resulted in heavy reliance on commodity exports (agriculture, raw materials), a weak industrial base, limited infrastructure, but also poor health and education systems. The country enjoyed a period of economic growth, coupled with political instability and social upheavals, aggravated by the vagaries of commodity prices, which in turn led to the stagnation of exports and investments, resulting in worsening economic conditions. By the early-1960s, as so many other countries in South America, Peru had a democratically elected president and congress The social landscape was characterized by a rise of fashionable radical ideas, intense peasant mobilization for land reform, and rapid urbanization that led to significant social movements. These movements, influenced by the Cuban Revolution, found fertile ground in deep-seated rural inequality, sowing the seeds of the internal conflict that sprang two decades later. Juan Velasco, the military leader who ousted Fernando Belaunde --the constitutional president-- and seized power (1968), headed what would be later known as the first phase of the Peruvian experiment. An ardent nationalist, he was determined to take the country out of secular underdevelopment by means of a number of widely believed to be long overdue reforms. The mining industry was then primarily composed of large- and medium-scale enterprises. All large-scale operations were foreign-owned: Cerro de Pasco Copper Corporation, Marcona Mining Company, Southern Peru Copper Corporation. Alongside coexisted a burgeoning group of mainly locally-owned, medium-scale mining companies: Compañía Minera Milpo, Compagnie des Mines de Huaron, Compañía Minera Atacocha, Compañía de Minas Buenaventura, Compañía Minera Huampar, among others, all of which flourished under the umbrella of the 1950 Mining Code. At the time, a significant number of projects and prospects were in the hands of multinational corporations, but no major investments were carried out in the 1960s; foreign investors waited for further incentives from the state, in order to commit the funds required to commission new mines. But the wind blew in a different direction, dissatisfaction with the old-style growth model spread, ideas related to the dependency theory were widely circulated; all over the Americas, a growing sense of resource nationalism floated in the air.
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