Written by Alonso Aquino – Associate, Peru
The sustained increase in global mineral prices—particularly copper, gold, and silver—has reinforced Latin America’s strategic importance in the global mining industry. Copper, essential for electrification and energy transition technologies, has seen growing demand driven by renewable energy, electric vehicles, and infrastructure expansion, spurring renewed investor interest in the metal as a potential investment opportunity following gold and silver rallies. In fact, commodity experts note that investors seeking exposure to copper typically pursue two main routes: one is through trading copper futures contracts, which involves actively speculating on price movements with leverage and daily settlements, and the other is indirect exposure through shares of copper producers, where investors benefit from metal price appreciation by owning stakes in mining companies rather than the metal itself .
This growing focus on copper reflects its dual role as both an industrial workhorse and as a method of portfolio diversification amid supply constraints and strong demand fundamentals. In this context, Chile and Peru collectively account for a significant portion of the world’s copper reserves and production, anchoring the Andean region as a cornerstone of future mineral supply and attracting global capital seeking long-term mining exposure.
Given Peru’s geological potential and long-standing mining tradition, understanding its mining concession system is essential for investors, operators, and financial institutions contemplating copper ventures. Peru’s legal mining framework establishes a structured, rights-based concession regime that separates mineral rights from surface land ownership while providing legal certainty for exploration and development—key attributes that enhance the jurisdiction’s viability for copper projects and make it attractive relative to other supply jurisdictions. In the years ahead, this legal clarity paired with Latin America’s copper endowment positions Peru as one of the leading destinations for capital seeking exposure to the shifting global metals demand landscape.
The Mining Concession: Legal Nature, Scope of Rights and Ongoing Obligations
Under the Peruvian General Mining Law, a mining concession is a real property right granted by the State over mineral resources located within a defined geographic area. It does not transfer ownership of the minerals in situ; rather, it grants the exclusive right to explore and exploit mineral resources within the concession area, subject to compliance with legal requirements.
Legally, the concession is considered a distinct, transferable right, independent from surface land ownership. It may be assigned, transferred, mortgaged, or subject to contractual arrangements under Peruvian or international jurisdiction. This characteristic enhances its value as a financial and commercial asset, particularly in structured transactions and joint ventures.
However, a mining concession does not include:
- Ownership of the surface land.
- Automatic authorisation to conduct exploration or exploitation activities.
- Water use rights.
- Environmental approvals.
- Social or community agreements.
To maintain the concession in force, the holder must:
- Pay an annual validity fee. This obligation applies regardless of whether the concession is in exploration, development, or inactive phase. Failure to pay the validity fee for two consecutive years results in forfeiture of the concession under the applicable administrative procedure.
- Meet minimum annual production. Applies after the legally defined grace period following the granting of the concession. Production thresholds are measured in terms of minimum economic value per hectare. If minimum production is not achieved, the holder must pay a penalty per hectare.
Prospecting vs Exploration: Legal Distinction Under Peruvian Law
In Peru, mining law draws a clear conceptual and legal distinction between prospecting and exploration, primarily under the Peruvian General Mining Law. Prospecting refers to preliminary, broad-based activities aimed at identifying areas with mineral potential. It generally includes non-invasive techniques such as geological mapping, surface sampling, geochemical surveys, and remote sensing. Prospecting does not necessarily require holding a mining concession, provided it does not imply exclusive rights or involve significant disturbance of the land.
Technically, prospecting and exploration rely on a range of geological and geophysical methods to assess mineral value. Early-stage prospecting often includes surface sampling and geological mapping, as well as the detection of magnetic anomalies through airborne or ground-based geophysical surveys, which may indicate subsurface mineralization.
By contrast, exploration is a more advanced and technically intensive stage carried out within the boundaries of a granted mining concession and seeks to confirm the existence, geometry, grade, and economic potential of a mineral deposit. From a legal standpoint, exploration activities require prior administrative and environmental authorisation. While mining concession grants the exclusive right to explore and exploit mineral resources within a defined area, it does not automatically authorise physical activities on the ground.
Once targets are defined, exploration typically advances to drilling programs. Reverse Circulation (RC) drilling is commonly used for faster, cost-effective sampling and grade estimation, particularly in oxide or near-surface deposits. Diamond drilling, on the other hand, retrieves continuous core samples, allowing geologists to analyse lithology, structure, alteration, and mineralization in detail—an essential step for calculating Mineral Resource Estimates in compliance with international reporting standards.
Permits and Regulatory Requirements for Exploration Activities
Before conducting exploration activities, concession holders must obtain several authorisations. While prospecting may be less regulated when limited to non-invasive methods, exploration requires a structured permitting process.
Key general requirements for exploration include:
- Approval of an environmental instrument.
- Authorisation for exploration activities from the Ministry of Energy and Mines or the relevant regional authority.
- Proof of surface land access rights (through ownership, lease, easement, or agreement).
- Archaeological clearance, if applicable.
- Water use permits, if water extraction is required.
Surface land rights are particularly important because the mining concession does not grant automatic access to the land. The concession holder must negotiate with private landowners, communities, or the State to secure legal access.
Conclusion
Copper stands at the centre of the global energy transition, infrastructure expansion, and industrial modernisation. For investors, this moment represents not only a cyclical commodity opportunity but a structural, long-term positioning in a metal that underpins decarbonisation and technological development. In this context, jurisdictions with strong geological potential and legal certainty become decisive factors in mitigating risk and enhancing project viability.
Peru offers a particularly attractive framework for foreign investors seeking exposure to copper and other strategic minerals. Its concession system, grounded in the General Mining Law and complementary regulations, provides legal security, transferability of rights and equal treatment for domestic and foreign investors.
Concessions may be freely requested under a transparent first-come, first-served system, and rights may be assigned, optioned or structured through domestic or international agreements. At the same time, the framework clearly regulates prospecting and exploration, requiring environmental compliance and negotiated surface access.
For investors, developers and METS companies operating in the Andean region, understanding these regulatory foundations is critical to mitigating risk and structuring projects effectively in Peru’s evolving mining landscape.
Harris Gomez Group METS Lawyers ® opened its doors in 1997 as an Australian legal and commercial firm. In 2001, we expanded our practice to the international market with the establishment of our office in Santiago, Chile. This international expansion meant that as an English speaking law firm we could provide an essential bridge for Australian companies with interests and activities in Latin America, and to provide legal advice in Chile, Peru and the rest of Latin America. In opening this office, HGG became the first Australian law firm with an office in Latin America.
As Legal and Commercial Advisors, we partner with innovative businesses in resources, technology and sustainability by providing strategy, legal and corporate services. Our goal is to see innovative businesses establish and thrive in Latin America and Australia. We are proud members of Austmine and the Australia Latin American Business Council.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. It does not create a solicitor-client relationship, and readers should seek independent legal advice for their specific circumstances. Harris Gomez Group accepts no liability for reliance on this content.