Colombia Ecopetrol To Invest $50 Mln in Explorations in Peru

Colombian state oil company Ecopetrol plans to invest $50 mln (34.2 mln euro) for the exploration at three hydrocarbon lots in Peru by the end of 2008, Ecopetrol president, Javier Gutierrez, said on November 22, 2007.

Ecopetrol will participate in the exploration of the Lot 90 together with Repsol Exploracion Peru, as well as of the Lots 101 and 134 with local subsidiary of Canadian Talisman Energy.

Separately, Ecopetrol along with Brazil's oil and gas giant Petrobras and Peruvian state oil company Petroperu signed an agreement to carry out a technical evaluation in six areas in the Maranon basin, Peru's northern Loreto region. Each company will have a 33.33 pct stake and Petrobras will be the technical evaluation operator.

Peru is among the first countries to become part of Ecopetrol's expansion abroad.

The company seeks to expand by establishing alliances with other companies and is engaged in talks with some operators in Peru, Gutierrez said.

Cimpor to invest US$125mn in cement production plant

Portuguese cement company Cimentos de Portugal (Cimpor) will invest US$125mn in the construction of a cement plant in southwestern Peruvian department Arequipa, Cimpor reported in a release.
The initiative will be carried out through the company's Peruvian subsidiary, Cimpor Inversiones, which has purchased 80% of the company Cementos Otorongo for 57mn soles (US$18.8mn).

It was Cementos Otorongo that, at the time, was developing the cement project. The company has enough raw material to produce cement and clinker, and has all the permits needed to build and operate a plant of this kind in Arequipa.

The plant's capacity will reach 650,000t annually, being able to cover 10% of Peru's cement consumption. It will initially sell only to the domestic market, but plans on exporting in the future.

The facility is expected to become operative in two years.

Besides Portugal, Cimpor also has operations in Spain, Turkey, China, Egypt, Mozambique, Morocco, Brazil and South Africa.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: November 23, 2007


Xstrata creates southern Peru division

Anglo-Swiss resources group Xstrata (LSE: XTA) is creating a southern Peru division in a move designed to promote the company's growth in the country, according to an Xstrata statement.

The company's Tintaya copper mine, along with the Las Bambas and Antapaccay projects in southern Peru, will fall under the new division, to be managed by newly appointed COO José Marún, formerly Tintaya's general manager.

Former technical services manager for Argentina's Minera Alumbrera, Luis Rivera, is taking over for Marún at Tintaya.

Ronald Luethe is to continue as general manager for projects in southern Peru while Domingo Drago is taking over as general manager of corporate affairs at the division.

Xstrata controls the Alumbrera gold-copper mine with a 50% stake. In Peru the company also has control of the Antamina copper-zinc mine together with BHP Billiton (NYSE: BHP), each holding 33.8%.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: November 21, 2007


Marcobre Gets $145 Mln Funding for Peruvian Marcona Mine

Peru-based mining company Marcobre SAC has got a $145 mln (99.2 mln euro) funding to develop its copper project Mina Justa in Marcona, in the southern region of Ica, the Peruvian Foreign Affairs Ministry said on November 16, 2007.

The financial institutions to support the project are the agency Export Development Canada, Korean Eximbank and German KfW IPEX-Bank.

Marcobre is 70 pct controlled by Canadian miner Chariot Resources Ltd (www.chariotresources.com). The remained is owned by South Korean state-run Korea Resources Corporation (KORES) and South Korea's copper producer LS-Nikko Copper Inc, previously known as LG-Nikko Copper Inc.

Marcobre seeks to consolidate its position of a medium-sized copper producer.

Peruvian mining exports totalled $12.1 bln (8.275 bln euro) in January to September 2007, up 16.5 pct year-on-year. Copper exports alone rose by 18 pct, according to latest data of Peru's export and tourism promotion commission Promperu.

Publication: Business Digest
Provider: AII Data Processing Ltd.
Date: November 20, 2007


Six prequalify for Kingsmill acid plant bidding

Peru's mining ministry reported that six parties have prequalified for the bidding to construct the Kingsmill acid water treatment plant to resolve environmental liabilities near the Yauli and Mantaro rivers.

The prequalified bidders are Peruvian engineering firms BISA, CESEL and GyM, the Chilean branch of Canada's Hatch, and two consortiums: one made up of Peru's COSAPI and the US arm of France's Veolia, and another between Mexico's Earth Tech and Canadian Environmental and Metallurgical.

Twenty potential bidders had shown interest in participating.

The ministry will accept official bids starting December 12 and open them January 21, 2008, with the first construction work set to start in the first quarter of next year, it said in a statement.

Vancouverite Peru Copper (PCR), the owner of the Toromocho copper project, recently presented a feasibility study for the Kingsmill plant and agreed to donate US$24.1mn to build the operation.

The endeavor aims to clean up acid runoff from mining into the Yauli and Mataro rivers in Junín department that has been a serious problem for decades as a result of activities linked to the La Oroya polymetallic smelter.

The pollution first started when the Cerro de Pasco copper corporation owned La Oroya and in 1934 finished building the Kingsmill tunnel as an annex to it. Today US company Doe Run owns La Oroya.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: November 16, 2007


Argentine Techint To Start 408 KM Gas Pipeline Construction in Jan 2008

Argentine industrial group Techint will start the construction of a 408 km long gas pipeline in Peru in January 2008, general manager of Peruvian gas exports consortium, Peru LNG, Barbara Bruce, said on November 15, 2007.

The gas pipeline will transport liquefied natural gas (LNG) of the Camisea field. It will start from the Ayacucho department and will reach the gas liquefaction plant in Pampa Melchorita on the Pacific coast of the country, run by Peru LNG. Between 10 pct and 15 pct of that plant is already concluded and some 85 pct of the equipment is bought.

The first ship, which will transport natural gas to Mexico, is expected to sail in May 2010. The capacity of each ship will round 170,000 cu m of LNG and every fourth day a ship will sail to Mexico.

The exports of gas from Camisea are awarded to Peru LNG, formed by U.S. energy group Hunt Oil, South Korea's SK Corp, Algerian Sonatrach, and Argentine Pluspetrol and Techint. Pluspetrol Peru Corporacion SA, local subsidiary of Argentine Pluspetrol, operates the gas field.

Publication: Business Digest
Provider: AII Data Processing Ltd.
Date: November 16, 2007


Peru, Argentina Seen To Attract More Copper Investments than Chile 2008-2012

Peru and Argentina are expected to attract more investments in the copper sector than Chile in the 2008-2012 period, Chilean brokerage LarrainVial said on November 14, 2007.

One of the reasons is that Chile is expected to produce 1.1 million tonnes of copper annually, which will be less than Peruvian and Argentine output.

Peru is the third biggest copper producer worldwide, accumulating 7.0 pct of the world output, after Chile with 35 pct and the USA with 8.0 pct. Peru is expected to post a 6.0 pct rise in its 2007 copper output and to produce more than 1.11 million metric tonnes.

Peru and Argentina are opening their copper market to foreign investment, a process, which has already started in Chile, Chilean Mining Minister, Karen Poniachik, said. There also is a process of displacement of foreign investments from Chile to Peru and Argentina, Poniachik added.

The Chinese gold producer Zijinc, for example, acquired the shares of British mining company Monterrico Metals in the copper project Rio Blanco, in the Piura department, northern Peru.

Publication: Business Digest
Provider: AII Data Processing Ltd.
Date: November 15, 2007

Cerro Corona gold-copper start-up delayed, costs rise, says Gold Fields

The start-up of Gold Fields` Cerro Corona gold-copper project in Peru will be delayed by four months with ore treatment now due to begin by mid-June 2008 rather than March because of the South African company`s inability to complete engineering tasks on schedule.

Cerro Corona, in Cajamarca department, is due to produce 140,000 oz per year of gold and more than 27,000 tpy of copper contained in concentrates.

Poor rock quality and inadequate material delivery rates have hampered building the tailings management facility and several contractors responsible for installing the concentrator have underperformed, Gold Fields said.

The company also increased its forecast for capital costs. Construction costs will rise by 23 percent to $421 million from $343 million, it said.

"While we are disappointed with the delay and the increased construction costs, Cerro Corona remains a robust project and will make a significant contribution to the future of Gold Fields. We have thoroughly reviewed every facet of this project and I am confident that the required steps have been taken to ensure completion within the revised project schedule and budget," said ceo Ian Cockerill, in a statement.

Cerro Corona has reserves of 3.2 million oz of gold and 1,089 million lb of copper.

Publication: Metal Bulletin
Provider: Metal Bulletin com
Date: November 15, 2007


Spanish Telefonica Invests $210 Mln in Peru Jan-Sept 2007

Spanish telecommunications company Telefonica invested a total $210 mln (144 mln euro) in Peru for the period from January to September 2007, Peruvian daily Andina said on November 12, 2007.

The number of the company's clients in Peru totalled 11.2 million in the same period, of them 4.0 million people used fixed telephony and the rest were clients of the mobile telephone service.

In turn, the clients of Telefonica in Latin America rose by 14.9 pct from January to September 2007 in comparison to the nine months to September 2006. The rise was mainly attributed to the 20.2 pct increase of the mobile telephony clients, whose number reached 94.7 million.

The most significant rise of the mobile telephony clients was registered in Peru, up 60 pct, Mexico, up 48.8 pct, Central America, up 36.8 pct and Argentina, up 28.8 pct.

Publication: Business Digest
Provider: AII Data Processing Ltd.
Date: November 13, 2007


Peruvian Credicorp Net Profit Up 75.9 Pct Y/Y Q3 2007

Peruvian financial holding company Credicorp reported a 75.9 pct year-on-year rise in its net profit for the third quarter of 2007 to a total $90.3 mln (61.7 mln euro), the company said on November 9, 2007.

The net profit rose by 3.3 pct compared to the net profit seen in the second quarter of 2007.

The accumulated net profit for January to September 2007 totalled $256.7 mln (175.5 mln), up 54 pct year-on-year.

Credicorp holds a 97.3 pct stake in Peruvian bank Banco de Credito (BCP). The holding Credicorp includes Banco de Credito de Peru, Atlantic Security Holding Corporation and Pacifico Peruano Suiza, listed on the stock exchange in Lima and New York.

BCP continues to be the main contributor of Credicorp's net profit with $88.2 mln (60.3 mln euro). BCP's net profit totalled $238.7 mln (163.2 mln euro) in the nine months to September 2007.

(Note: Unless otherwise stated, all figures/comparisons are for Q3 2007/Q2 2006.)

Publication: Business Digest
Provider: AII Data Processing Ltd.
Date: November 12, 2007

Mapfre could launch mortgage unit

The Peruvian unit of Spanish insurer Mapfre is considering the launch of a mortgage financing unit, Lima-based financial daily Gestión reported.
Mapfre Perú has the capacity to enter the mortgage financing business and so it is a project under consideration, the paper reported VP Mario Payá as saying.

The Mapfre unit would grant mortgage loans and later offer those in securitized form to institutional investors like insurers and private pension fund managers, according to the report.

Mapfre is betting strongly on Latin America and Peru for growth and earlier this year bought Peruvian insurer Latin Seguros for US$13.4mn.

Mapfre is a top five player both in Peru's non-life and life markets and one of the largest insurance groups in Latin America.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: November 12, 2007


Chilean Tottus To Invest $60 Mln in Opening up to 15 Hypermarkets in Peru 2008

Chilean hypermarket chain Tottus will invest $60 mln (41.23 mln euro) in the opening of up to 15 hypermarkets in Peru in 2008, the CEO of Tottus, Juan Correa, said on November 6.

Some 50 pct of the hypermarkets will be located in Lima, he added. The remaining will be definitely opened in cities such as Chiclayo, Trujillo and Arequipa, Correa was quoted as saying.

Peru is currently enjoying an economic stability and growth, which is the main reason Tottus wants to expand on the Peruvian market, he commented.

Tottus opened a new hypermarket in Lima's district Chorrillos on November 6. The new hypermarket is the fifth of the company in Peru.

Tottus is owned by the Chilean retail chain Falabella. The total investment plan of Tottus for 2007 stands at $50 mln (34.36 mln euro).

Publication: Business Digest
Provider: AII Data Processing Ltd.
Date: November 7, 2007


EIU's Peru Business environment at a glance

Policy towards private enterprise and competition

2008-10: Business-friendly rules the norm, but distortions persist, owing to powerful lobbying groups.

2011-12: Continued strengthening of business rules and intellectual property protection to comply with terms of free-trade agreement (FTA) with the US.

Policy towards foreign investment

2008-10: Few formal barriers, but some ambiguity in policy towards investors. Mining, energy, communications and transport will remain magnets. Addressing community-based tensions will be important in reducing political risk.

2011-12: Emphasis on attracting foreign investment into transport infrastructure, mining, energy and tourism.

Foreign trade and exchange controls

2008-10: Implementation of FTA with the US. Negotiation of bilateral FTAs with the EU, Mexico and China. Tariffs will remain below the common external tariff (CET) of the Comunidad Andina (CAN, the Andean Community).

2011-12: Gradual liberalisation to comply with bilateral trade agreements.


2008-10: System remains unsettled and complex. Net assets and financial transactions taxes retained at lower rate; little prospect of cut in 19% value-added tax (VAT) rate.

2011-12: Additional elimination of some of the many tax exemptions to widen the tax base, but no major reform.


2008-10: Capital market grows in depth and sophistication. Bank lending sees cautious growth.

2011-12: Deepening local capital market as pension funds grow.

The labour market

2008-10: Additional rigidities introduced as labour code is revised. Wage pressures weak, but skill levels generally low.

2011-12: Unions still weak, owing to high unemployment and underemployment. Implementation of FTA with the US increases pressure for greater labour-market flexibility.


2008-10: Concessions issued and awarded for transport infrastructure, including roads and ports.

2011-12: Further development of projects linking Peru’s transport infrastructure with that of Brazil.

Publication: EIU Business - Background
Provider: The Economist Intelligence Unit Limited
Date: November 5, 2007


Cos investing USD500mn/y in electric sector

Generation, transmission and distribution companies in Peru are investing US$500mn/y to meet growing energy demand, principally in the provinces. During the first half of this year, power demand in Arequipa rose 65% year-on-year, 44% in Apurímac, 23% in La Libertad, 20% in Huancavelica and 20% in Tumbes. Power prices in Peru have dropped more than 30% in the last 10 years due to efforts by the ministry, energy and mining investment watchdog Osinergmin and companies. The sectors pending task is to increase coverage as 25% of the population has no service, which increases to 65% in rural areas.

Date: 2007-11-01
Source: Business News Americas, Chile
Publication: Euclid Infotech - Utilities News
Provider: Euclid Infotech
Date: November 2, 2007

Repsol YPF invests in Peru

Repsol YPF announced an investment of USD 2.000 million in Peru from 2008 to 2015. The plan is to develop operations in the hydrocarbons sector The information was provided by Carlos Alfonso director of the company. BIS - Business Information Systems

Publication: BIS - Business Information Systems
Provider: Business Information Systems
Date: October 31, 2007

Cepsa acquires stake in Lot 127

Spanish oil and gas company Cepsa affirmed that its subsidiary in Peru has acquired 80 percent share in Lot 127, located in Loreto department. The agreement was signed with Loon Peru that planned to invest USD 40 million to explore the facility. BIS - Business Information Systems

Publication: BIS - Business Information Systems
Provider: Business Information Systems
Date: October 31, 2007