Category: Peru

Phelps Dodge Corp, which owns Peru’s third-largest copper mine, Cerro Verde, has said it has secured loans of $450 million to help with its expansion plans for the mine. The US company said it may replace $90 million of the financing with a bond sale in Peru. This follows a decision late last week by Cerro Verde shareholders to approve issuing bonds for up to $250 million. Phelps Dodge expects to triple annual production to 300,000 metric tons following expansion.

Peru experienced 0.09% deflation in September, making it the second month of consecutive deflation in the country after 0.18% recorded in August. This takes cumulative inflation for the nine months to end-September to 0.89%. Brazil also witnessed a fifth deflationary month with a rate of 0.53%, following August’s fall of 0.65%. Meanwhile, Colombia recorded a rise of 0.43% in September’s rate of inflation, pushed up by higher school fees at the start of the academic year, according to official sources. Cumulative inflation was at 4.42% as at end-September. And Venezuela registered 1.5% in September, meaning that cumulative inflation for the first nine months of the year is now 11.6% against 14.7% for the same period last year. Argentina is due to release its figures on Wednesday.

Peru has set the date of 16 December for the anticipated privatization of La Granja copper deposit. The project, which has gold as well as copper deposits, has been explored before, most recently by Melbourne-based BHP Billiton. The Australian company, however, pulled out citing low-grade ore and high extraction costs. Officials say new technology now available should make extraction easier. An estimated $700 million is needed to develop the project.

Shareholders of Peruvian copper mining group Cerro Verde have approved a $250 million bond issue, the company said. The funds raised will be used to pay for its $850 million expansion plans which are expected to boost copper production to around 300,000 metric tons a year by mid-2007 from around the current 100,000 tons a year.

However, Peru’s GDP growth rate in July again slowed to 4.92%, less than the government 6.5% forecast and market expectation of 5.9%. This follows growth of only 4.6% recorded in June, the lowest level since last October. Since then, growth rates have been consistently above 6%.

Former president of Peru, Alberto Fujimori, who has been in Japan since resigning in 2000, has received a new Peruvian passport in Tokyo. Fujimori, who faces human rights and corruption charges in Peru, has claimed Japanese citizenship since leaving Peru but has said that he plans to return to the country to stand for presidential elections in April 2006. Peru has unsuccessfully sought his extradition from Japan and has banned him from running for office until 2010.

AngloGold Ashanti of South Africa, the world’s second-largest gold producer, has said it will stop exploration in Peru after disappointing finds. The company has spent six years and around $20 million prospecting in Ecuador. It does, however maintain agreements with several mining companies and says it will return in the future if major finds are made. Neighboring Peru is the world’s sixth-largest gold producer and has Latin America’s largest goldmine.

Peru’s Finance Minister Pedro-Pablo Kuczynski, a former managing director at Credit Suisse First Boston and an ex-World Bank official, was named the nation’s new prime minister to head a cabinet that took office Tuesday. Kuczynski’s deputy, Fernando Zavala, was appointed finance minister. Kuczynski returned to the finance minister’s post in 2004 and has overseen the longest unbroken stretch of economic growth in Peru’s history. President Alejandro Toledo´s mandate ends next July.

Peru´s exports rose 41 percent in June to $1.4 billion, marking 40 straight months of export growth as the US, China and Canada boosted purchases of metals and fishing products. Gold exports jumped 25 percent to $225 million, copper exports rose 14 percent to $220 million and fishmeal doubled to $177 million. Natural gas exports nearly tripled to $117 million. Peru’s economy grew at annual rate of 5.5 percent in the five months through May.

Peru’s gross domestic product expanded 7.1 percent year-on-year in May, the fastest pace since December. Much of the growth came from non-commodities industries, as manufacturing gained 9.6 percent and construction rose 8 percent. Economy & Finance Minister Pedro-Pablo Kuczynski last week said the economy would grow 6 percent this year, compared with 5 percent in 2004.