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Peru: The new government lays out its plans for mining (from IKN380)

A small sample from yesterday’s 28 page edition of The IKN Weekly, IKN380, where the real work gets done round here.


Peru: The new government lays out its plans for mining

On Thursday
the new Cabinet Chief, Fernando Zavala, went to Peru’s new Congress in a key
moment for the new government. According to the law he needs to get approval
for all Ministerial positions from the Congress by vote and to do that, must go
and explain what they plan to do. As Peru’s Congress is under an absolute
majority of the opposition Fujimorista (FP) party (Keiko lost to PPK in the run
off by a whisker) that’s not necessarily a given vote.

I won’t go
into every aspect and issue covered, we’re here for mining so that’s the
subject to cover today and as Zavala laid out the government’s plans for the
sector (14). I took away three things. A soundbite or two for mining friendly
headlines, the extended quote that lays out the PPK vision for mining and the
new measure this government plans to bring in to help move projects forward
(all eyes on Tia Maria, a test-case if ever there were one). All translated from
the Spanish by these hands.

The
soundbites
:

“A modern
Peru needs sustainable mining”.

“Mining
investment is welcome”.

We like
those.

The
extended quote
: “We will generate the conditions which allow
our rich natural resources to be converted into products of higher value, not
only via foundries and smelters but also through mining clusters that invest in
the care of the mining environment, investigation, innovation and automization
of the sector.”

The new
measure
: There are other reforms in the pipeline which are
aimed at the small private miner/mining company, such as the phasing out of the
use of mercury in gold extraction. But when it comes to our focus the big reform
will be the “Adelanto Social”, best translated as the “Social Advance Payment”
which reminds me of the way Ecuador requires mining companies to invest and
give money to local communities for civil projects before the mine gets going.
In Peru, exploration stage companies will also be required to lay down cash for
new local works, though presumably the scale will be small (and let’s face it,
most decent junior explorecos in Peru already have these types of plans,
certainly the ones I invest in).

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