Peru Rare Earth: Critical FTA Stalls, US Pact Signed

• Peru rare earth ambitions have hit a setback after India’s commerce minister said a bilateral free trade agreement is unlikely to be concluded soon.
• Talks began in 2017; a ninth round concluded in Lima in November 2025, with a tenth round pencilled in for New Delhi in January 2026.
• The proposed FTA’s critical minerals chapter was to cover neodymium, praseodymium, dysprosium and terbium.
• Peru signed a bilateral critical minerals framework with the United States on 4 February 2026, one of 11 deals signed that day under the FORGE initiative.
• A May 2026 geochemical database paper describes Peru’s rare earth knowledge base as incipient, with no economic deposit yet delineated.
• The only named Peru REE discovery, the Capacsaya claim near Cusco, has remained at claim-stage geology since 2015.

Peru rare earth ambitions took a hit on 4 July 2026 when India’s commerce and industry minister, Piyush Goyal, told reporters a free trade agreement with Peru is unlikely to be concluded in the near term, citing unresolved market access disputes over Indian imports. The comment reverses the timeline Peru’s own diplomats were promoting as recently as January 2026, when ambassador Javier Manuel Paulinich Velarde told Indian industry a dedicated critical minerals chapter would be finalised by June or July 2026.

India’s push for that chapter reflects its own strained rare earth position, tracked in REM’s India rare earth coverage, as New Delhi seeks supply diversified away from China. Peru’s pitch centred on neodymium, praseodymium, dysprosium and terbium, the four elements most exposed to Chinese export policy and most in demand for magnet manufacturing.

Peru Rare Earth Potential Meets Geopolitical Reality

Negotiations between the two countries began in 2017 and stalled during the pandemic years. A ninth round wrapped up in Lima in November 2025, with a tenth round scheduled for New Delhi in January 2026. Goyal’s July comments, made on the sidelines of a trade exhibition in New Delhi, gave no indication of when or whether that round would proceed. He cited specific products where India cannot offer Peru market access as the sticking point, rather than the critical minerals chapter itself.

The gap between Peru’s stated 2026 timeline and the pace of comparable regional deals is instructive. Chile’s own India Comprehensive Economic Partnership Agreement has been in force since May 2025, giving New Delhi a working precedent for a South American minerals pact that Peru has yet to match. REM’s Chile rare earth page tracks how that agreement has played out on the ground.

US FORGE Framework Offers Peru an Alternative Track

While the India talks stall, Peru already has a working alternative. On 4 February 2026, Peru signed a bilateral critical minerals framework with the United States at the inaugural Critical Minerals Ministerial in Washington, one of 11 agreements signed that day alongside Argentina, Morocco, the Philippines, the UAE, the UK and others. The signing brought the Forum on Resource Geostrategic Engagement, or FORGE, to 21 bilateral deals in five months, backed by more than $30bn in US financing including the $10bn Project Vault strategic reserve, according to the US Department of State.

FORGE succeeds the Minerals Security Partnership and operates as a plurilateral coalition rather than a bilateral trade negotiation, meaning Peru’s participation does not depend on the tariff-by-tariff bargaining that has stalled the India talks. For Peru, that makes FORGE membership a lower-friction route into Western supply chain diversification even as its rare earth chapter with India sits unresolved.

Peru’s Rare Earth Geology Remains Early Stage

The underlying geology does not yet support the diplomatic urgency on either side. A May 2026 database paper consolidating 31,125 REE geochemical records from Peru’s national geochemical information system describes the country’s rare earth knowledge base as incipient, with prospective zones concentrated in southern Peru tied to niobium-yttrium-fluorine-type pegmatites, according to a peer-reviewed database study. No economic deposit has been delineated.

The only named discovery of note, RioSol’s Capacsaya claim roughly 123km northwest of Cusco, reported total rare earth oxide grades above 3% in altered granite host rock when announced in 2015. A 2021 academic paper still described it as a recent discovery under characterisation rather than an advancing project, and there is no public record of work beyond claim-stage geology in the years since.

Peru’s established mineral identity remains built on copper, silver and zinc, where it ranks among the world’s top three producers, not rare earths. Less than 1% of the country’s land has undergone formal mineral exploration, leaving open the possibility that further REE potential sits undiscovered. Whether that potential gets tested now depends less on geology than on whether India and Peru find their way back to the negotiating table, or whether Peru’s FORGE membership and its South America rare earth positioning move faster than the FTA does.