Spotlight: Peru's gold rebound amid rising prices
With a global price of around US$2,300/oz, Peruvian gold miners can expect record production and double-digit growth this year. Most of Peru’s gold potential is in the north, where mining companies such as Yanacocha and Poderosa operate.
“Expectations are very high. You have Yanacocha, which, although Yanacocha Sulfuros has stalled, continues producing from what remains of its original pit,” former energy and mines minister Miguel Incháustegui told BNamericas. “On the other hand, you have Boroo Misquichilca, which bought Lagunas Norte and they plan to expand the mine until at least 2038,” Incháustegui, who is now an independent director of Canadian mining company Candente Copper, said.
The energy and mines ministry (Minem) reported that 35.4 million fine grams (1.14Moz) of gold were produced between January and April, compared to 29.7mn fine grams a year ago. Newmont's Yanacocha was the top producer, with 3.67mn fine grams, up from 2.36mn. Singapore's Boroo Misquichilca, meanwhile, accounted for the biggest production increase. Its Lagunas Norte deposit, formerly owned by Barrick Gold, produced 2.83mn fine grams, up from 978,595. “On issues of national gold production, expectations are positive basically due to Boroo's performance,” Incháustegui said.
Minera Poderosa's production also improved, after operations were interrupted last year because of clashes with illegal miners. Poderosa, in La Libertad region, produced 3.07mn fine grams, up 12.5% year-on-year. Although Incháustegui expects Poderosa's production to grow despite the problems with illegal miners, he does not rule out the possibility of another stoppage. Pan American Silver's Shahuindo and Buenaventura are the only mines that registered falling output.
Minem said production from 218 medium and small-scale gold miners grew 11% to 15.5mn fine grams.
CHALLENGES
Despite the auspicious scenario, exploration and informal mining remain problems to be solved. Investments, including in exploration, should pick up in 2025, given that improving regulations and the creation of a digital one-stop shop are on the agenda this year. Exploration is key to reach the 6.7Moz produced in 2005. Total production last year was 3.21Moz. But brownfield investments have also been announced. Poderosa will invest US$14mn and the US$106mn expansion of Minsur's Pucamarca unit has been approved.
Pan American Silver presented plans involving up to US$577mn to extend the useful life of Shahuindo and La Arena. The plans are being reviewed by the certification service for sustainable investment (Senace).
Regarding illegal mining, the rising gold price is also encouraging illicit extraction, with no signs of curbing the activity in the short term.
According to a presentation by economics think tank IPE, 80t (2.57Moz) of gold were exported illegally last year and not registered by Minem. Local media reported that illegal mining is spreading in regions such as La Libertad despite plans to confront the problem, generating concerns among citizens and the business community.
Source: https://www.bnamericas.com/