Peruvian authorities launch new offensive against illegal mining

The Peruvian authorities launched their latest offensive against illegal mining when they raided a wildcat mine in the country’s Loreto region on Tuesday. The Peruvian Navy, police, and prosecutors raided the gold mine on the River Marañon, near the towns of Saramiriza and Borja. According to reports in the local press, the Peruvian security officials seized and destroyed dredging equipment used in the gold mining operations.

Separately, the Peruvian National Institute for Statistics and Information announced that production in the mining and hydrocarbons sector fell by a combined 2.4% in February. The decline was driven largely by steep falls in copper, molybdenum, tin, and oil extraction.

Anglo American, the fourth-largest mining company in the world, added to the bad news on Wednesday when it said that it would abandon its Michiquillay copper mining project in Peru. Nonetheless, Anglo stressed that it is still committed to the larger of its two copper projects in Peru, Quellaveco. The report noted however that Quellaveco “is the kind of complicated project shareholders mostly hate: It is remote, could cost over $6 billion and … is likely to take three to four years to build.”

Lastly, Peruvian mining company Buenaventura approved operations financing of up to $500 million, which may include the company’s first ever bond sale. Though Buenaventura, the largest Peruvian-owned mining company in the country, posted a $188 million loss in Q4 of last year, it still plans to launch the $200 million Tambomayo gold and silver mining project by 2016 and the $500 million Chucapaca gold and copper mining project by 2018.