The United States has put forward several labor and environmental standards proposals, which they hope will benefit both the U.S. and Peru. During a recent visit to Peru, José Fernández, U.S. Under Secretary of State for Economic Growth, Energy, and the Environment, expressed a strong interest in strengthening sectors such as U.S. investment in Peruvian mining and foreign trade. His visit resulted in signing a memorandum of understanding with the Peruvian Ministry of Foreign Affairs. This agreement aims to reinforce governance in critical minerals, enhance investment opportunities, and secure global supply chains between the two countries.
Beyond Copper: Securing Critical Minerals for the Future
“This agreement is not just about copper; it’s about critical minerals in general,” Fernández emphasized. “Naturally, copper is an essential mineral for the energy transition, but it goes much further. Lithium could be another metal.” His remarks underline that U.S. investment in Peruvian mining is essential for creating secure, sustainable, and reliable supply chains for critical minerals that are crucial for the energy transition and other strategic industries.
Fernández further highlighted the importance of these supply chains, stating that “it is a national security priority” for both Peru and the United States. He pointed out that global market models are already in place for strategic minerals, with demand expected to increase exponentially. According to estimates, this demand is projected to rise “100-fold” by 2050 to meet climate goals. U.S. investment in Peruvian mining will play a crucial role in meeting this growing demand and addressing the significant challenge of securing these vital minerals for the future.
National Security and the Energy Transition
“Meeting this demand will pose a huge challenge for our nations,” Fernández noted, “because if we cannot secure these minerals, we will not be able to meet the (environmental) goals we have.” This sentiment underscores the essential role that Peru will play in the global efforts to transition to greener energy and meet climate objectives, mainly through its rich deposits of copper, lithium, and other critical minerals.
Facilitating, Not Dictating: The Role of U.S. Companies
In addition, Fernández clarified that the recent agreement between the U.S. and Peru aims to strengthen bilateral ties without being a direct instrument of U.S. foreign policy. He rejected the notion that U.S. companies operating in Peru simply fulfill government objectives. “China can tell its companies to invest; by law, they are instruments of the Chinese government. We cannot do the same with American companies,” he explained. “I cannot tell Newmont that they have to invest in Peru. That’s not what this is about. That’s why we have this agreement.”
Ethical and Sustainable Investments in Peruvian Mining
Instead, the agreement facilitates collaboration, offering U.S. companies access to key stakeholders within Peru’s Ministry of Energy and Mines. “We can provide information; we have access to people in the Ministry of Energy and Mines who can answer questions, meaning we can facilitate but not order. This means that our investments sometimes take more time, but they are not foreign policy instruments,” Fernández noted. He emphasized that U.S. investments prioritize ethical and sustainable practices, aligning with shared values between the two nations.
“We offer to work with communities, to benefit countries because there are many examples of projects that did not follow the best standards and did not succeed,” Fernández added. He stressed that the success of U.S. investment in Peruvian mining projects hinges on a commitment to upholding ethical and sustainable practices. This includes respect for local communities, compliance with labor laws, and adherence to environmental regulations—fundamental values that U.S. companies bring to their investments abroad.
Peru’s Role in the Minerals Security Partnership
Fernández also pointed out that U.S. investment in Peruvian mining will benefit significantly from Peru’s participation in the Minerals Security Partnership. This international initiative seeks to strengthen the critical metals supply chain, ensuring secure access to these essential resources. “Being a member of the forum also allows Peru direct access to the 15 partners who are members of this partnership,” he explained. The partnership offers financial backing for critical minerals projects, further boosting the potential for U.S. investment in this sector. With these resources, Peru is better positioned to expand its role as a global leader in critical mineral production.
Expanding U.S. Investment Beyond Mining
While mining remains a crucial area of interest, U.S. investment in Peru extends beyond this sector. Fernández led a business mission to explore investment opportunities in various industries. “We leave with a vision of a country that, not only in the mining field but also in IT, technology, health, and many other fields, is ready to receive investment from the United States and other countries,” he affirmed.
Growth in Trade Relations: A Positive Trend
Fernández elaborated on the success of trade and investment relations between the two countries, noting that trade between Peru and the U.S. has nearly tripled since the Free Trade Agreement (FTA) signing. “Today it’s almost $27 billion, compared to $9 billion 15 years ago; in addition, we have nearly $7 billion in investment.” This growth is a testament to the strong economic ties between the two nations, with U.S. investment in Peruvian mining playing a pivotal role in driving this expansion.
Job Creation Through U.S. Investments
As U.S. companies continue to invest in Peru, they have also contributed to significant job creation. “We have created more than 1.1 million jobs through U.S. investment in this country,” Fernández said, underscoring the positive impact of these investments on Peru’s labor market. U.S. companies ensure their investments are mutually beneficial by adhering to high labor and environmental responsibility standards.
U.S. Approach: Strengthening Offers, Not Imposing Choices
However, Fernández clarified that U.S. investment in Peru does not come with strings attached. “That’s our offer, but it’s never about telling a country not to have relations with China or anyone else because we have significant commercial relationships with China,” he said. The U.S. approach is centered around providing a better investment offer, allowing Peru to weigh the options and choose what aligns best with its development goals.
Conclusion: A Cornerstone for Future Cooperation
U.S. investment in Peruvian mining continues to be a cornerstone of this bilateral relationship. By focusing on sustainability, collaboration with local communities, and securing critical mineral supply chains, this partnership aims to benefit both nations and contribute to global energy transition efforts. Fernández concluded, “It’s simply about improving the offer and then letting the country compare.”
In conclusion, U.S. investment in Peruvian mining remains a cornerstone of the strong bilateral relationship between the two nations, driving economic growth and fostering ethical and sustainable practices in critical mineral supply chains. Beyond mining, U.S. interest extends into other sectors such as IT, technology, and health, highlighting Peru’s potential as a diverse and attractive destination for foreign investment. As this partnership continues to evolve, U.S. investment in Peruvian mining, alongside emerging opportunities in these additional industries, will play a crucial role in enhancing Peru’s development and its position in the global economy.