Mineria

Peruvian Mining
Already a major producer in precious and base metals, Peru is capitalizing on its mining friendly environment to treble copper production over the next coming years.
A REPORT BY GBR FOR E&MJ

TABLE OF CONTENTS
A Proven Mining Country, an Emerging Copper Giant ................56 Fernando Gala Interview, Vice Minister of Mines of Peru..........64 Peru’s Large Precious Metalsand Copper Producers ..............66 Peru’s Mid-Tier and Junior Companies ......................................74 Peru’s Other Hidden Treasures ..................................................82 Lima, a Hot Spot for Engineering and Construction Firms ........87 An Ever-Increasing Range of Providers......................................92 Miners and Communities: Building Long-term Partnerships....97
This report was researched and compiled by Global Business Reports (www.gbreports.com) for Engineering & Mining Journal. Editorial researched and written by Alfonso Tejerina (alfonso@gbreports.com), Katie Bromley (kbromley@gbreports.com) and Sarah Timson (stimson@gbreports.com). (Photo courtesy of Antamina)

MARCH 2011

2011

PERUVIAN MINING

A Proven Mining Country, an EmergingCopper Giant
Peru’s extraordinary mineral wealth and political stability ensure the country remains one of the world’s favorite mining destinations
diture contracted dramatically (-42% in 2009), however in Peru it only decreased by 18%. Peru was indeed the third largest recipient worldwide for exploration expenditure that year; only Canada and Australia could boast more.

The Super-cycle
“I havenever seen a cycle like this in my 52 years in the industry,” said Richard Graeme, senior vice president and general manager of Lumina Copper SAC, a Chinese-owned company working on the Galeno copper project in northern Peru. The metal prices bonanza and the closeness to the presidential elections have prompted the demand by certain politicians for higher taxation of mining profits. But leadersin the industry fret this could seriously jeopardize the country’s ability to attract new investments. “We are in the good part of the cycle and both companies and countries need to take advantage of that,” said Luis Carlos Rodrigo Prado, lawyer at Rodrigo, Elías & Medrano law firm and president of the Canada-Peru Chamber of Commerce. “However, you cannot just create new taxes that would not workin a slightly different environment. Right now the regional and local governments have millions in their bank accounts that cannot be invested, therefore at this point in time it does not make sense to give them more money. Besides, it is more beneficial for the country to attract huge new investments than to raise the taxes.” For Hans Flury, until very recently president of the National Society ofMining, Oil and Energy (SNMPE). “We need to be competitive. Our neighbors have similar geography and rich resources so legal stability is key to attracting investment. The higher the taxes, the less attractive the country becomes.” Along with the natural resistance of any business to pay more taxes comes the frustration of mining companies that see that the money they pay does not translate intomuch needed investments in health, education and infrastructure. A big proportion

Barrick operates two gold mines in Peru, Lagunas Norte (pictured) and Pierina, with combined production of about 1 million oz gold last year. (Photo courtesy of Barrick)

A brief study of the history of Peru’s fascinating civilizations reveals how linked mining has been to the country’s developments. Over 1,000years before the Spaniards killed Inca Emperor Atahualpa after robbing him of his gold and silver, the Señor de Sipán, a leader of the Moche culture, was buried with a number of precious objects including a famous necklace, half of gold and half of silver, symbolizing the equilibrium between the two main gods, the Sun and the Moon. Nearly a millennium before this, the Chavín culture had already...