© Reuters. Expectant investors in Peru due to the closure of questioned mines
Monica Martinez
Lima, Nov 26 (EFE) .- The announcement of the closure of four mining units in Peru has set off alarms in this sector, which is going through a “boom” of high international prices, but also underlines a new strategy of the Peruvian government focused on the dialogue to deal with this industry.
“One of the concerns is that some of these units, especially the Apumayo unit, were generating environmental impacts, mainly impacting water sources” in provinces of the Ayacucho region, former Deputy Minister of Environmental Management José de Echave told Efe.
The president of the Council of Ministers, Mirtha Vásquez, announced on the 20th that the scheduled closure of the Pallancata and Inmaculada units of the Hochschild Mining company, Breapampa of SAMI and Apumayo of the company of the same name, all producers of, and.
The Prime Minister’s announcement sought to end a social conflict with the communities of the Lucanas, Parinacochas and Páucar del Sara Sara provinces that demanded the contamination of their water sources and unleashed violent protests at the end of October.
COMPANIES REQUEST EXTENSION
Vásquez said that the closures were scheduled by the companies and the supervisory authorities, but the mining companies responded that they were requesting their expansion of operations and requested a meeting with the chief of staff.
After that meeting, Vásquez clarified that the closings will not be unilateral and that the legal security of the companies will be respected.
De Echave explained that there are some of these companies that are requesting the extension, “but it is not that this request is automatic, it has to present the modification of the environmental impact study that has to be evaluated by the corresponding authorities, the National Service of Environmental Certification, and it also has to go through public hearings and be presented to the population. “
In the agreement of Vásquez with the communities, the intervention of the environmental evaluation and inspection body was established, and the National Water Authority to see the delimitations of the headwaters of the basin, said the researcher of the organization Cooperacción.
“It is already clear that the government is not going to make unilateral decisions on this issue,” De Echave said.
The former deputy minister stressed that “he would hope that the dialogue will achieve some important agreements that allow the situation to improve in the area (…) and that the concerns that the population has about environmental impacts, mainly in the water sources, are addressed and resolved. “.
SLIDES IN THE BAG
However, the declaration of the closure of mining units caused an immediate reaction in the business sectors, in addition to a collapse in the price of their shares on the stock market.
“Obviously, the most affected of all of them was that of Hochschild Mining, which is listed on the London Stock Exchange, given that the announcement affected two of its main mines, Inmaculada and Pallancata,” the head of analysis of the company told Efe. stock company Kallpa, Marco Contreras.
The stock of this company “came to be between 50 and 60% below, then there was a partial recovery of the stock and ended up closing 27% below on Monday, a day that lost almost a third of its value, which is quite a lot. critical, “Contreras noted.
In the analyst’s opinion, “these types of announcements made by the prime minister end up causing mistrust and great concern, not only in investors related to the mining sector, but also in the entire private sector.”
Despite the “political effect,” listed mining companies “are reporting record levels of profits,” due to rising international metal prices, Contreras said.
This “boom” in prices such as copper, one of the main metals exported by Peru, has led the government of the leftist Pedro Castillo to announce a tax reform to modify the payment of mining taxes.
For this reason, Contreras considers that “what we are going to see is probably a volatile scenario until the end of the year” for the private investor.
