IMPACT OF METALLIC COMMODITY PRICES ON PERUVIAN MINERAL EXPLORATION INVESTMENT, 2000 – 2019

Rosario Antezana¹, Jhamily Gilvonio ¹, Wagner Vicente ¹

and  León Rivera ¹

¹ Faculty of Business Sciences, Universidad Continental, Huancayo, Perú

Abstract

The objective of this study is to determine the impact of the price of metallic commodities on investment in mining exploration in Peru between 2000-2019. For this purpose, a quantitative approach, explanatory level and non-experimental – longitudinal research design was considered. Likewise, Tobin’s Q theory and the optimal investment policy were used to understand the behavior of the price in mining investment. Also, for the correct statistical and econometric estimation, the generalized method of moments was used, taking into account the variables, gross domestic product of the United States and China, real interest rate and the global price of metals, which determined that the price of metallic commodities had a positive impact on investment in mining exploration in Peru. It was found that the price coefficient is + 0.22, i.e., with a one unit increase in the global price of metals, mining investment in exploration increases by 0.22 (million dollars). Therefore, according to the results, mining investment decisions in the country are very vulnerable to the world macroeconomic situation, especially in the face of instability in global metal prices, which is why it is proposed that Peru should promote investment in manufacturing and industry, so that it can generate a competitive offer in the international market for non-traditional products.

Keywords: commodities, price, mining exploration.