Category: Peru

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.

Former Peruvian President Alberto Fujimori, who is in exile in Japan, received a new identification card and may return to the country to contend for the presidency in next year´s election. Peru has been seeking Fujimori´s extradition on charges of embezzlement and involvement in the murder of 25 civilians in 1991 and 1992 when he was in power. Fujimori has said the efforts to arrest him amount to political persecution.

Seventy percent of the 869 workers at Shougang Hierro Peru, Peru’s only iron miner, went on strike Monday, their third in 12 months, to push for a pay raise. The strike is the second to hit Peru’s mining industry in a month. Workers walked off the job for eight days in June at Peru’s biggest zinc and lead miner Volcan Compania Minera.

Pedro Pablo Kuczynski, Peru’s Economic Minister, threw his hat in the ring to take over the top spot at the Inter-American Development Bank (IADB) when its current president, Enrique Iglesias, steps down in September. Iglesias has occupied the position for 17 years. Peru’s President Alejandro Toledo said Kuczynski would not immediately resign his post.

Peru’s proposal to pay back early as much as $2 billion of debt owed to the Paris Club was accepted by a majority of the group’s creditor nations. Peru will cut its borrowing costs by paying down the debt early since the government’s bond yields today are lower than the interest rate it is paying on the Paris Club debt, Economy Minister Pedro-Pablo Kuczynski said last week. Peru will sell bonds in international and domestic markets to finance the payment.