Category: Peru

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.

Peru´s Minister of Finance, Pedro Pablo Kuczynski, said the country plans to place bonds worth $700 million on international markets to raise funds to help prepay its $8.1 billion debt with the Paris Club. The maturity of the bonds will range from 15 to 30 years. This week Standard and Poor´s upgraded Peru´s debt from stable to positive.

Peru’s long-term foreign currency debt rating outlook was raised to positive from stable by Standard & Poor’s, which cited improved expectations for medium-term economic growth. Peru’s economy, which has posted 46 months of growth, is diversifying exports from raw materials such as ore and fishmeal to more finished products, including textiles and chemicals, as trade grows with China, the country’s second-biggest export market. Peru´s GDP has grown an average of 4.5 percent a year since 2002 while budget deficits have been around 1 percent of GDP.