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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).