VINA DEL MAR, Chile--Peru's exports will likely grow 5% next
year on the back of a recovery in foreign demand, Peruvian Finance
Minister Luis Miguel Castilla said Friday.
Peru, the world's second-largest copper producer after Chile,
reported exports of about $46 billion in 2011. The private-sector
association Adex expects exports to decline to almost $44 billion
this year as a result of lower mineral shipments.
Mining represents about 10% of Peru's gross domestic product,
30% of government revenue and 60% of total exports. Copper is the
country's main export and, in 2011, accounted for about 20% of
total shipments.
"We forecast foreign demand [for minerals] will improve on
China's growth and the U.S. recovery," Mr. Castilla said on the
sidelines of a summit of finance ministers from Latin America and
the Caribbean.
Copper production, which reached 1.24 million tons in 2011, is
expected to double by 2017, Mr. Castilla added. In 2012, the Mines
and Energy Ministry expects copper output to have increased 7.8% to
1.33 million tons.
The mining sector's expansion has increased demand for energy,
but supply isn't growing at the same pace.
"We need to avoid a bottleneck," Mr. Castilla said. He said the
government is working on increasing thermoelectric and
hydroelectric generation.
Mining and energy companies, however, have complained about
excessive hurdles to approve power projects, a common situation in
Chile, where environmental groups have stopped or delayed large
energy projects and put supply at risk.
Like many other emerging-market, export-based countries, Peru is
facing a strong local currency versus the greenback that is hurting
exporters, particularly those outside the mining sector.
Despite the sol's appreciation against the dollar, Mr. Castilla
ruled out establishing controls on capital.
"We rule out capital controls because they don't change the
sol's appreciating trend," he said.
So far this year, the sol has strengthened nearly 5% against the
dollar.
Write to Graciela Ibanez at graciela.ibanez@dowjones.com
