Peru guarantees economic growth of at least 6% for upcoming years

Interoceanic Highway Brazil Peru

With the implementation of the economic stimulus plan and the search for greater competitiveness in the medium term, Peru guarantees an annual growth rate of at least six percent for the next years, Maximixe consulting firm said.

“If in the coming years, conditions are similar to the current ones, without tightening of financial conditions abroad and without adverse climate impacts, the economy could grow six percent annually over the five years," Jose Razuri analyst at Maximixe estimated.

Last Wednesday, the Executive approved the second package of measures that will prevent an economic slowdown in Peru in the coming months, in case of global uncertainty.

Economy and Finance Minister Luis Miguel Castilla said that the country has officially relaunched its competitiveness agenda and expects to grow at rates of six percent in the next years, with sustained increase in productivity.

He added that said relaunch of the competitiveness agenda seeks to achieve continuous growth in Gross Domestic Product (GDP).

In this regard, Razuri said that after the agreement made this week among the eurozone countries to overcome their fiscal debt crisis, the international outlook is friendlier for Peru, at least in the short term. (Andina)

Peru likely to become largest producer of wind energy in Latin America

Peru will become one of the largest producers of wind energy in Latin America, renewable energy expert at the European University of Madrid Alberto Rios said.

Rios, who was a guest speaker at a wind farm integration seminar, organized by Concytec in Lima, praised the construction of three new wind farms for 2012, which would significantly benefit the country, as it would reduce dependence on natural gas.

He said that the development of wind energy in Peru will boost social inclusion of rural populations - and by not emitting Co2, the country could reduce the emissions of greenhouse gasses.

In addition, the three new wind farms are being built in the towns of Talara, Cupisnique and Marcona, which are expected to be completed by the end of 2012.

"The importance of wind energy is that in countries with great potential, such as Peru, it becomes a fantastic vehicle to hook up to electrical generation systems, which are modern, sophisticated and highly competitive," he said. (Andina)

Bird-watching seen as Peru’s new tourism potential

Peru could benefit from the diversity of its fauna and cater to the approximately 69 million bird-watchers in the United States, said Jose Koechlin, president of Peru’s Hotel Society.

Koechlin told Andina that these visitors could have a positive impact on creating jobs and improving the quality of life in rural areas in Peru.

"We have 84 of the 104 ecological zones in the world, which allows for a large presence of birds. Therefore it is necessary to insist on the protection of natural areas that are home to this legacy," Koechlin stated.

According to the country’s export and tourism promotion agency Promperu, Peru has one of the largest varieties of birds in the world.

Ideal spots for bird watching are the Manu National Park, between Cusco and Madre de Dios, and the Pantanos de Villa, in Lima. A 15-day tour at the Manu National Park can cost around $3,000.

Peru holds two world records: 331 bird species spotted in one day in the Manu, and 569 species sighted in one location at the Tambopata National Reserve, peruthisweek.com reported today. (Andina)

video: http://www.youtube.com/user/PROMIX
video: http://www.youtube.com/user/hotelscusco

Antonio Brufau: investing in Peru is a great advantage and luck because it is a tremendously friendly country to develop investment projects

Peru is becoming an attractive destination for foreign investment because, amid the difficult international context, it is a very friendly country for development projects and guarantees political and macroeconomic stability as well as energy supply.

The chief executive of oil company Repsol, Antonio Brufau, said this week that investing in Peru is a great advantage and luck because it is a tremendously friendly country to develop investment projects.

After holding a meeting with Peruvian President Ollanta Humala Tasso on Thursday at the Government Palace, Brufau expressed confidence in Peru and announced that the Spanish company will invest three billion dollars in the Andean country over the next five years.

Previously, the Ministry of Energy and Mines (MEM) reported that mining investments totaled US$ 4.04 billion between January and August 2011, a 70 percent increase over the same period in 2010, noting also the importance of Peru as a destination for global investments.

The presence of capital in our country, as well as announcements of new millionaire investments, are being registered in parallel to the energy matrix change that Peru has taken towards natural gas. (Andina)

World Gold Council: Large gold mines dominate Peru's economy

Large gold mines play a dominant role in the Peruvian economy, a study by gold-mining-industry group the World Gold Council said Friday.

The report, which examined the economic impact of the country's four largest gold mines over a period of 14 years, found that they accounted for 60% of the $5.6 billion in gold exports in 2008.

The WGC's research focused on Newmont Mining Corp.'s Yanacocha, Barrick Gold Corp.'s Lagunas Norte, Gold Fields Ltd.'s Cerro Corona and Compania de Minas Buenaventura's Orcopampa. The mines represented nearly 10% of foreign direct investment in Peru and accounted for over 20% of mining exports and 12% of total exports from Peru in 2009, the group said.

Gold mining also plays an important role in government revenues, with the government collecting around $800 million from the four mines in 2009, Dow Jones Newswires quoted the industry body as saying.

While aggregate employment across the four mines is seen peaking at 5,000 employees this year, 99% of the work force is made up of Peruvian nationals, while community salaries represent nearly half the $250 million expected to be paid in wages in 2011 through 2014, WGC said. It added that around 90% of total procurement spending by the four mines was on national suppliers. (Andina)

Canadian giant set to operate in Peru with Century Mining takeover

A Canadian mining giant will soon operate in Peru as the Canadian federal government have given approval for White Tiger Gold's takeover of Century Mining, which already operates in the Andean country and which is owner of the Lamaque mine in Quebec and other mines in the world.

Under the planned transaction, Century Mining will be acquired by a wholly owned subsidiary of White Tiger, a company that trades on the TSX but operates mainly in Russia, reported The Canadian Press.

The deal has received some of the necessary approvals, including from shareholders, but is still subject to final approval of the Toronto Stock Exchange and TSX Venture Exchange where the companies' shares are listed.

"We appreciate the approval given by the Government of Canada. We are now one step closer to creating a larger, more diversified gold mining company with multiple properties in various stages of production and development in Canada, Russia, and Peru" said Daniel Major, president and chief executive officer of Century and Geoffrey Cowley, White Tiger's CEO, in a joint statement.

Century's stock closed at 21.5 cents, up half a cent, on the Venture Exchange while White Tiger's ended trading Wednesday at 62 cents, down three cents on the Toronto Stock Exchange.

White Tiger Gold Ltd. is a TSX-listed mining and exploration company, focused on the development of mineral resources in the Russian Federation and which currently operates the Savkino heap leach gold operation located in southeastern Siberia.

In addition to Ildikan, Nasedkino/Uryum and Pridneprov, White Tiger Gold Ltd. also holds gold exploration licences in Zolin-Arkinsk and Takhtamygda which are prospective geological environments in south central Siberia.

Century Mining Corporation is a Canadian gold producer and holds strategic land positions in Canada, the United States and Peru.

Its strategy is to grow to its gold production through existing mine expansions and acquisitions of other strategic and synergistic gold opportunities. (Andina)

Peru miners invest US$4.44 billion in Jan-Aug

Mining companies in Peru invested US$4.44 billion in the first eight months of 2011, up 70% from the same period last year, the government said.

In the January-to-August period, mining companies invested US$679 million in infrastructure, US$597 million on mining equipment, US$555 million on processing plant equipment and US$547 million on preparation activities for projects, the Mines and Energy Ministry said Wednesday.

According to marketwatch.com, companies also spent US$533 million on production and US$520 million on exploration, the ministry said.

Cajamarca region had investments of US$745 million, while Apurimac had investments at US$554 million, Cuzco at US$507 million and Ancash at US$459 million.

Companies investing in the sector include gold producer Minera Yanacocha, which is 51.35%-owned by Newmont Mining Corp., and Xstrata PLC.

Yanacocha invested US$556 million in the period, while Xstrata invested US$514 million at its Tintaya mine and US$489 million at its Las Bambas project, the ministry said. (Andina)

Peru's Antamina Mine expansion to up 2012 output

Peru's Antamina Mine

Peruvian base metals miner Compania Minera Antamina expects to increase production next year following the completion of a large-scale expansion at its mine, company Chief Executive Abraham Chahuan told business newspaper Gestion.

In an interview published Monday, Chahuan said the US$1.3 billion expansion of the mine is "practically in the final stage."

"We could be starting the new equipment by the end of the year, and we expect that our capacity will increase in 2012," he noted.

Antamina the biggest producer of copper in Peru, with output of 1.2 million metric tons of copper concentrate a year. It is also the largest producer of zinc, with 600,000 tons a year of concentrates, he said.

Chahuan also told Gestion that Antamina is the second-largest producer of silver and the largest producer of molybdenum in Peru.

Chahuan said the new windfall taxes placed by the Peruvian government in the mining sector have put the mining industry at the limit of what can be placed before competitiveness declines.

The owners of Antamina are BHP Billiton, with a 33.75% stake; Xstrata Copper with another 33.75%; Teck Cominco Corp. with 22.5% and Mitsubishi Corp. with 10%.

The mine, located in the central Andes Mountains region, started operations in 2001. (Andina)

Guerrero double gives Peru first win in WC qualifiers

A second-half brace from Paolo Guerrero earned Peru a hard fought victory over Paraguay in their first 2014 World Cup qualifier on Friday.

Peru continued their superb Copa America form in their first match of qualification, defeating visiting Paraguay 2-0 at a packed National stadium in Lima.

The best chance for the Peruvians in the first half came moments before the break when Juan Vargas was sent into the box on the left side.

The Fiorentina star delivered a low, swift ball across the face of the goal, perfectly finding the right foot of Guerrero, but the striker's effort from five metres flew by the wrong side of the right post, passing the by-line, Goal.com reported.

The striker earned back the confidence of the fans a minute into the second half after a fantastic pass from Jefferson Farfan sent the attacker through. Guerrero did the rest, taking a touch by Diego Barreto and a defender, finishing into the open goal with ease.

The Hamburg striker added his second 27 minutes into the second half. Farfan sent Claudio Pizarro on goal, and the Werder Bremen man chipped the ball in front of net, falling right to the the feet of Guerrero, who made no mistake, finishing with a low effort, sealing the victory. (Andina)

Peruvian restaurant opens new stores in Florida

Rotisserie chicken. Photo: Hector Vinces.

La Granja Peruvian restaurant has opened two new locations in Florida, United States, one in Port St. Lucie and the other in Okeechobee.

The Port St. Lucie La Granja is the 30th store for the Margate-based regional chain and the second location on the Treasure Coast. A Fort Pierce store opened at 7040 Okeechobee Road in 2005.

Monica Castillo, manager of the Fort Pierce store and general manager of La Granja's north district stores, is a franchisee at the Port St. Lucie location.

Castillo's partner in the franchise is Paul McNesky of Port St. Lucie, a longtime customer of the Fort Pierce store who said he saved up to buy a franchise because the food is good and the price is right, according to a news release.

La Granja, meaning "the farm," specializes in rotisserie chicken and other Peruvian specialties served with a number of different fresh salsas, Castillo said. (Andina)

Peru May Keep Interest Rate at 4.25% for a Fifth Month on Global Slowdown

Peru’s central bank will probably leave borrowing costs unchanged for a fifth month as the threat of recession in Europe and the U.S. outweighs concern about accelerating inflation.

The seven-member board, led by central bank President Julio Velarde, will keep the overnight rate at 4.25 percent today, according to 17 of 18 economists surveyed by Bloomberg. One analyst predicts a 0.25-point cut to 4 percent. The board will announce its decision at about 7 p.m. New York time.

The threat of stagnation in Europe and the U.S. has dimmed the outlook for Peru’s commodity-dependent economy and led the government to announce what it has called “preventive” stimulus measures. Though the central bank has indicated it will cut rates if global risks intensify and domestic activity slows, rising prices and stronger-than-expected domestic growth indicate there’s no need for laxer policy yet, said Juan Pablo Fuentes, a Latin America economist at Moody’s Analytics Inc.

“There’s a risk of a hard landing, so the government is preparing its tools for a negative scenario,” Fuentes said in a telephone interview from West Chester, Pennsylvania. “The central bank will be paying attention to the very fluid global situation and change its stance if necessary.”

Stimulus, Sentiment

The Andean nation is tapping its first fiscal surplus in three years to finance stimulus measures worth about $470 million as it seeks to reverse a decline in public infrastructure spending in the first half of this year.

The stimulus will become more “aggressive” should a global slowdown cause exports and company spending to ease, Finance Minister Miguel Castilla said Sept. 22.

The International Monetary Fund on Sept. 20 cut its 2011 growth forecast for Peru to 6.2 percent from 6.6 percent previously. Growth will slow to 5.6 percent next year, the Washington-based lender said.

The central bank’s latest survey shows companies are less optimistic about domestic demand and hiring prospects because the global outlook has darkened, said Carlos Durand, president of the Lima Chamber of Commerce, in a Sept. 27 interview.

Investor caution on the global outlook and “political uncertainty” following Peru’s presidential election is affecting medium and long-term investment, Luis Castellanos, chief executive of Banco Internacional del Peru, told reporters Sept. 29. Demand for consumer loans remains “vigorous,” he said.

Policy, Trade, Growth

President Ollanta Humala on Oct. 3 confirmed Velarde’s appointment to serve a second five-year term, which Pedro Tuesta, a former Peruvian central bank analyst and current economist at 4Cast Inc. in Washington, said indicated policy continuity.

Growth in retail and services helped offset a slowdown in manufacturing and construction in July and fuelled a 6.5 percent rise in gross domestic product, beating analysts’ and the central bank’s expectations.

Cement demand rose for the first time in three months in August while electricity output climbed at the fastest annual pace in six months, which suggests growth is accelerating, Tuesta said.

Peru’s trade surplus will probably fall to $4.3 billion next year from $7.4 billion this year because of lower copper, zinc, gold and silver prices, Velarde said Oct. 4.

China’s growth will remain “strong” this year and next, which “will guarantee that the price of exports will remain relatively high,” he said.

Gross domestic product growth will slow to 5.7 percent in 2012 from 6.3 percent this year, the central bank chief said Sept. 16.

Europe, Precautions

Economic activity will slow in the next few months amid weaker construction and manufacturing output even though consumer demand remains “very strong” Velarde told congress Oct. 4. “In investment, there isn’t a lot of pessimism, but nor has there been such a strong recovery yet.” Investors “are waiting to see what will happen with the global outlook.”

Policy makers will probably give more weight to the fall- out from Europe’s debt crisis, which led global stocks and commodity prices to tumble since their last meeting, said Roberto Melzi, at strategist at Barclays Capital Inc. in New York.

“Risks to economic activity haven’t dissipated anywhere by any means,” said Melzi, who forecasts a 0.25-point rate cut today to be followed by similar cuts at the bank’s November and December meetings. “The global crisis is deepening.”

Higher fuel costs pushed Peru’s consumer prices up 0.33 percent in September from 0.27 percent in August, driving the annual inflation rate to 3.73 percent, a two-year high. The central bank targets annual inflation in a range of 1 percent to 3 percent.

Monthly inflation may slow to close to zero before year-end as some prices reverse recent increases, Velarde said Sept. 16. The annual inflation rate will converge toward the central bank’s target range next year, he said.

Peru’s sol posted the steepest quarterly decline since 2008 in the July-through-September period as copper prices fell and concern about slowing world growth wiped $10 trillion from global equities.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.

Yale University officials travel to Cusco for formal opening of Inca exhibit

Casa Concha - Cuzco Perú

Yale University officials are heading to Peru’s southeastern Cusco region this weekend to celebrate the opening of a new home for Inca artifacts long housed at the US university.

Provost Peter Salovey will join other members of the University in the Imperial city for the formal opening of the Universidad Nacional de San Antonio Abad del Cusco-Yale International Center for the Study of Machu Picchu next Thursday.

The ceremony follows this summer’s centennial celebration of Machu Picchu’s discovery in 1911, and will cement a collaborative relationship between the UNSAAC and Yale for the years to come, Salovey said.

“Yale is very pleased to be the UNSAAC’s partner in this project, and is delighted by the progress we have made together so far,” Salovey said in a Thursday email.

“We expect Yale faculty and students to travel often to the museum for research projects involving these objects, and we are very impressed by the beauty of Casa Concha and the way the objects will be housed and displayed there.”

Meanwhile, Yale archaeology professor Richard Burger ’72 said that hosting the artifacts in Cusco enabled greater protection and conservation than would have been available in Machu Picchu.

The Inca artifacts that will soon be on display in Peru caused decades of controversy between Yale and the Peruvian government, as both fought for control of the collection discovered between 1911 and 1916 by Yale archaeologist Hiram Bingham III 1898 and housed in Yale’s Peabody Museum for much of the past century, Yale Daily News reported.

The center’s opening comes after Harold Forsyth, the Peruvian ambassador to the United States, conferred the Order of “The Sun of Peru” — the nation’s highest civilian award for extraordinary services to Peru or contributions to the art, literature, culture or politics the country — upon University President Richard Levin at a ceremony in Washington, D.C.

Though the artifacts have not quite returned to Machu Picchu, they will reside just 50 miles southeast of their original home in a 16th century Cusco mansion known as Casa Concha, which serves as the site of the center jointly-run by UNSAAC and Yale.

Hosting the artifacts in Cusco enabled greater protection and conservation than would have been available in Machu Picchu, Yale archaeology professor Richard Burger ’72 said, adding that Cusco was the capital of the Inca empire.

“Casa Concha is a remarkable place because you have Inca architecture visible and you have colonial architecture from the sixteenth and seventeenth centuries visible,” Burger said.

Planning for the Center has primarily been a collaborative process between Yale and UNSAAC, with the Peruvian government playing a secondary role, Burger said. The government has played an important role in helping import large dioramas and other supplies needed for the exhibits, he added (Andina)

Peruvian organic produce to feature on EU priority list

The European Union plans to add Peru to a preferred list of third world organic food supplying countries through legislation.

Peru’s National Agricultural Health Service (SENASA) organic products director Jorge Jave said the EU authorities had included Peru as a priority in the list along with China and Turkey, freshfruitportal.com reported.

“It’s a process and we are in the final stage, we are optimistic that by the end of this year or the start of next year we will obtain this permission,” Jave was quoted as saying.

He stressed the inclusion requirements for the list were similar to the demands placed on E.U. countries, which meant legislative and certificate costs would be low.

Argentina and Costa Rica are the only Latin American countries currently on the E.U. organic import list.

Bananas, coffee and cocoa represent 90% of Peru’s organic exports, according to website Agraria.pe.

The main markets for this type of produce are the U.S. and the E.U., although demand is growing in Asia, especially in Japan, South Korea and China. (Andina)