Late last week, the Peruvian sol suffered
its steepest one-day fall of the last two years, dropping by 1.1%, because of
poll results showing the leftist presidential candidate Veronika Mendoza in a
tie for second place with Pedro Pablo Kuczynski. Bloomberg noted that Mendoza
support toughening environmental regulations, which would undoubtedly affect
Peru’s mining-dependent economy.
According to Alfonso Montero, the chief investment officer
of Credicorp Capital Colomiba SA, “If Mendoza were president, all of the
markets would be overvalued. The best scenario would be Brazil and the worst is
Venezuela.” Despite the political uncertainty, Peru’s ETF has been the world’s
best-performing ETF, and the Peruvian sol has actually climbed in value in
recent months.
In mining-related news, Peruvian police seized
a large amount of chemicals destined for an illegal mine in the department of
Puno. The police pulled over a truck that had been carrying the illegal mining
materials and detained the drivers. Unfortunately, isolated interdictions like
this represent just a tiny fraction of the materials that find their way to
illegal miners.
Late last week, the Peruvian authorities also carried
out a new raid against illegal mining camps in the department of Puno,
involving more than 250 police officers specialized in environmental crimes.
Like most of the government’s raids, this one resulted in the seizure of much
illegal mining equipment and supplies, but no arrests.
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