Essay by manukyan November 2014

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During the Republican period besides silver and gold in Peru there was a great demand of copper and zinc. As the price was decreasing and the investment were risky, the companies tried to do the best to get their money back. Also the huge part of the economy of Peru was mining so the national government started emphasizing mainly on internal companies, giving those long-terms loans. It provided good legal and political framework for mining companies.

At that time the mining in Peru increased a lot (data from the exhibit 1).

But besides the good impact of the economy of Peru, the mining brought some problems, in fact people living in mining areas associated mining with altering social relations within the community.

Also there was a great competition between the mining companies for water and land.

Quantitative Analysis (Most interesting trends)

Mining sector of Peruvian economy had a steady average annual growth of approximately 8.13%,

topping at 12.9% in 1998-99 period.

Peruvian economy heavily relies on its mining sector as it has a steady share of GDP which in the period of 1998-2002 grew from 4.7% to 6.4%.

At the same time Mining Sector exports more than doubled from $1.47 billion to $3.73 billion and comprises nearly the half of all Peruvian exports. This means the sector is of primary interest for the Peruvian government as it guarantees foreign cuurency flow to the country and as follows a stable currency and macroeconomic situation.

Price analysis for copper and zinc shows a steep decline trend after topping 130$/lb for copper in 1995 and 37.5$/lb for zinc in 1997. International prices for those two metals crucial for Peruvian economy plummeted more than 50% from their respective maximums.

As a result of this catastrophic descend, mining firms increased drastically the production volumes...