According to a report by Guolian Minsheng Securities, Peru, the world's second-largest copper producer, continues to rely heavily on established copper mines, with few new mines coming online in the past five years. The older mines are facing declining ore grades, limiting output increments. Looking globally, the copper mining supply is constrained by long-term insufficient capital expenditures in the industry, which impacts mid-to-long-term copper supply. Given the limited increment on the supply side, coupled with the strengthened expectations of interest rate cuts by the Federal Reserve, a new cycle of rising copper prices is anticipated, thus making investment opportunities in the copper sector attractive. Key points from Guolian Minsheng Securities are as follows: Peru, as the world's second-largest copper producer, maintains an annual output of over 2.4 million tons, rich in mineral resources and a significant producer of base and precious metals. Currently, Peru ranks as the second-largest copper producer globally and is also a major producer of gold, silver, and zinc. According to the latest data from the United States Geological Survey, Peru holds 12.0% of the world's copper reserves, 3.9% of gold reserves, 15.3% of silver reserves, 9.5% of zinc reserves, 5.3% of lead reserves, and 2.8% of tin reserves. Data disclosure shows that apart from the pandemic-affected years of 2020 and 2021, Peru's annual copper output has sustained over 2.4 million tons. With a predominance of older mines, there have been few new greenfield projects launched in the past five years. Based on the analysis of ten notable mines, only the Quellaveco and Mina Justa mines were newly commissioned in the last five years, starting operations in 2022 and 2021, respectively, with a combined capacity of about 300,000 tons per year, while other operating projects have been in place for a long time, some dating back to the mid-20th century. This reflects the limited capital expenditures on copper mining development in Peru in previous years, leading to a scarcity of new greenfield projects. The economic environment in Peru remains favorable, with infrastructure construction booming. Prior to the pandemic in 2020, Peru's GDP had been steadily growing, but saw a contraction of -10.9% in that year due to COVID-19. Recovering rapidly post-pandemic, Peru's GDP grew by 13.4% in 2021 and 2.7% in 2022. However, in 2023, negative growth was experienced due to climate disasters, but the GDP growth is expected to turn positive in 2024 at around 3.1%. In 2019, Peru launched the latest National Infrastructure Program (PNIC), aimed at addressing a long-term infrastructure gap of approximately $110 billion from 2019 to 2038. Under the PNIC framework, Peru prioritized 52 infrastructure projects totaling $28.5 billion, targeting completion by 2025. Chinese enterprises have a combined mining capacity of about 600,000 tons per year, with the Toromocho project being the first large-scale copper mining project established by Chinese companies overseas. Currently, there are two major Chinese-held mines in Peru: China Aluminum Corporation's Toromocho project and Minmetals Resources' Las Bambas project. China Aluminum Corporation acquired 100% ownership of the Toromocho world-class copper project in 2007, forming a wholly-owned subsidiary for construction, development, and operation. The Toromocho project is notable for being the first world-class copper mine built from scratch by Chinese enterprises, reaching trial production in December 2013, with stable profitability from copper concentrates exceeding 200,000 tons. The Toromocho Phase II expansion project commenced in 2018, and upon completion, annual output of copper concentrates will increase to 300,000 tons. Las Bambas is a joint venture project operated by MMG (62.5%), a wholly-owned subsidiary of Guoxin International Investment Co., Ltd. (22.5%), and CITIC Metal Co., Ltd. (15.0%). The mine began commercial production in July 2016 and is one of the largest copper mines in the world, with expected annual production of copper concentrates estimated between 280,000 to 320,000 tons. Risks to watch include significant fluctuations in metal prices, geopolitical and policy risks, and exchange rate volatility.