LIMA, Feb. 14 (UPI) -- Peru is facing growing competition from China for its share of the global copper ore market, which is at the risk of shrinking amid aggressive mining and marketing by East Asia's economic giant.
The Latin American country depends on the mining sector for nearly 15 percent of its gross domestic product but has recently seen competition from China, one of its major trade partners, gnawing into its traditional share of world markets for the metal.
The latest data on Peru's production came from world leader Chile's Copper Commission, which cited figures indicating that China became the world's second largest copper producer in 2010, after Chile, overtaking the United States and Peru.
Copper prices spiked this month after constant highs in January and last year and traders predicted tight supplies could push the prices way beyond $10,000 a ton, perhaps as high as $11,000 a ton.
The global copper trade is thriving on the strength of short supplies and rising demand.
Last month China's state-owned Nonferrous Metal Mining announced it would invest more than $450 million in new production capacity in the Hubei province.
Latin American neighbor and world leader Chile's copper production fell 1.6 percent in December and Zambia faced disruptions in output, leading to trade anxieties.
China produced 197,000 tons more in 2010 than in 2009, reaching a total production in the year of 1.25 million tons. With that output data, China advanced over the United States (which produced 1.13 million tons) and Peru (1.19 million tons).
Cochilco said the trend could continue through 2011 and the Asian giant could produce 1.42 million tons of copper during the year. Chile is likely to continue its dominance of the world copper market with 5.84 million tons, accounting for 32 percent of global production.
The commission said the trend would likely continue through 2012, The Santiago Times said, citing the commission's data.
Peru depends heavily on export revenues and despite recent success in building a market-oriented economy the country faces high poverty rates of more than 36 percent, a third of them in the category of extremely poor citizens with scant resources and opportunities for economic betterment.
The government last year initiated plans to develop the mining sector and make commodities exports more profitable. Plans were put in place to develop gold and zinc mines and redress the trade balance with the United States, China, Chile and Brazil with more processed merchandise and manufactured exports rather than just raw materials. However, the government has struggled to attract foreign investors to the country's sluggish economy.