Peru has been in political turmoil since December when former president Pedro Castillo was democratically deposed and arrested after he attempted to undemocratically dissolve the Peruvian Congress in an authoritarian power grab. A power grab the likes of which had not been seen in Peru for about 30 years.
As a result of Peru’s ongoing unrest with an interim president, protests across the country, and civilians being killed, the country has ground to something of a halt both politically and economically. On the economic front, Peru is one of the world’s leading producers and exporters of copper, with millions of jobs in Peru being indirectly linked to the country’s mining industry more broadly. With copper in short supply, the Biden administration must act now to list copper as a critical mineral.
The mining sector composes 8.5 percent of Peru’s GDP. Furthermore, minerals comprise 63.9 percent of Peru’s total exports. Unsurprising given that Peru is the world’s second-largest copper producer. In short, mining is the lifeblood of the Peruvian economy.
Due to the precarious situation that Peru finds itself in at the moment, a great deal of mining activity in the country has suddenly paused due to the ongoing social unrest. With this slowdown in production, copper prices have soared.
Copper is all around us and essential to a wide range of basic goods. It can be found in electrical equipment — in both motors and wiring — as well as in industrial machinery and plumbing.
Additionally, copper is also essential to long-term technological innovation that will serve to more effectively combat climate change. Copper is a necessary component in wind turbines, solar panels and batteries, to name a few of its revolutionary economic uses. In short, copper and its uses are absolutely critical.
Senators and members of Congress on both sides of the aisle support copper being declared a critical mineral. Elected officials beyond Washington also understand how essential copper is to economic vitality. Many governors are witnessing firsthand what a shortage of global supply is doing to its pricing and the impact on their states’ economies. Govs. Spencer Cox (R-Utah), Mark Gordon (R-Wyo.), Brad Little (R-Idaho), Brian Kemp (R-Ga.), Mike Dunleavy (R-Alaska) and Tate Reeves (R-Miss.) have all stated their support for copper being declared a critical mineral. The endorsement for this effort demonstrates the national importance of declaring copper a critical mineral.
The global economy was just starting to get its post-COVID footing when war broke out in Ukraine as a result of the Russian invasion driven by Putin’s aggression and imperialist ambitions. Global supply chains are in a particularly sensitive moment and another long-term shock to their system due to global copper supply shortages is not welcome.
By declaring copper a critical mineral, the United States would encourage greater investment by private sector entities to increase copper mining within the country. Additionally, this would prompt the exploration of greater possibilities for recycling copper, which are already in use.
The United States is already the fifth largest copper producer in the world. The essential nature of copper to the economy makes its availability an issue of national security. As a result of the ongoing unrest in Peru, 30 percent of the country’s copper supply is essentially inaccessible, approximately 3 percent of the world’s total.
As the largest economy both in the Western Hemisphere and the world, the United States should not be subject to the political headwinds that are sadly facing Peru at this time. For the country’s long-term economic well-being, the Biden administration must declare copper a critical mineral.
Sarah E. Hunt is the CEO and president of the Joseph Rainey Center for Public Policy. Follow her on Twitter @sarahehunt01. J.P. Carroll is a senior fellow for national security and inclusive governance at the Joseph Rainey Center for Public Policy. Follow him on Twitter @JPCarrollDC1.