Peru climbs rapidly up the ranks of the world gold producers

Engineering and Mining Journal, Apr 2000 by Albareda, Guillermo

PERU, the third-largest country in South America (1.285M km^sup 2^), well-known for its extraordinary cultural and archaeological legacy and its imposing landscape, also has a large variety of natural resources, outstanding among which are its mining resources. Among the latter, gold is the metal that has been so significant for the countrv and Latin America.

The mastery evidenced by Peruvian pre-Columbian civilizations resulted in extraordinary creations, now in museums and exhibitions, by goldsmiths and metallurgists during the pre-Inca and Inca cultures which today still amaze the world.

This mastery was maintained during Spanish Colonial times and up to today.

In November 1532, the Inca leader Atahualpa, after being captured in Cajamarca (northern part of Peru), offered Conquistador Francisco Pizarro three rooms filled with gold and silver in exchange for his freedom. The payment of this ransom (reneged upon by Pizarro) had great impact because "it affected even the European economy, causing inflation and destabilization of the financial system."(1)

Due to the abundant mineral resource potential existing in the Peruvian soil, Peru ranks seventh among the world's major mining regions. Preliminary figures estimate that in 1999, Peru exported gold for a value of around $1.2B, a sum that exceeds by approximately 30% the total recorded the previous year ($925M). This has confirmed, for the second consecutive year, that gold is the leading export product of Peru.

With regard to production, according to the statistics of the Gold Committee of the National Mining, Petroleum, and Energy Society (SNMPE), gold production reached 130 mt. Peru thus recorded the highest gold production rate growth in the world, if it is taken into account that in 1989, gold production was only 9.9 mt.

Peru has risen in the world ranking of gold producers from 15th to eighth place.

Currently, and for the fourth consecutive year, Peru maintains its leadership among the gold producers of Latin America.

SOLID BASE GUARANTEES MINING GROWTH

This growth has been possible thanks to a rehabilitated economy, with controlled inflation and significant international monetary reserves. The Peruvian economy is open to the world, and priority is given to competitiveness. Moreover, the existence of an adequate legal framework has attracted the attention of entrepreneurs who now consider Peru an important investment objective.

The great growth of mining production is due to the effort of both entrepreneurs and workers, internal stability, the government promotion of investments, and above all, to the richness of natural resources. Peru also has competent mining professionals and miners.

Due to Peru's immense mineral resources, mining has assumed the role of being the country's engine of development and the industry understands its obligation to minimize the environmental impact to achieve an adequate balance between conservation, sustained development, and the people's legitimate right to utilize their natural resources to fulfill their needs.

EXtRAORDINARY GOLD GEOLOGY...

There are many potential gold-bearing trends in Peru, such as the Pataz-Buldibuyo trend (La Libertad), the Marcapata-Sandia trend (Puno), the Nazca-Ocona trend (Ica and Arequipa), the Cajamarca sector, and the Apurimac sector. In the last few years, local and foreign companies have been carrying out an aggressive exploration and development campaign in these and other areas, which has led to the discovery or rediscovery of several important deposits. Currently, the existing variety of deposit types has permitted the development of both underground and open pit operations.

Mineralogical studies show that the predominant gold mineralization in the deposits in the various gold trends or areas in Peru are native gold and electrum.

According to De Montreuil's publication, gold is found as tellurides or nagyagite in some deposits(2O. Mineralogical research of Peruvian gold trends and areas confirms the great importance of the linking of native gold and electrum to pyrite and quartz mineralization, with pyrite frequently being the host of the gold.

In accordance with Plenge,the presence of gold is common practically throughout the whole of Peru: "The deposit types in identified areas include veins, disseminated deposits, gold placers and stratafied deposits where gold is the main element."(3)

The most important gold producers in Peru are Minera Yanacocha, Minera Barrick Misquichilca, Minera Sipan, Minera Ares, Minera Aurifera Retamas, Minera Poderosa, Consorcio Minero Horizonte, and Cia. de Minas Buenaventura, among others. Minera Yanacocha is located in Cajamarca, in northeastern Peru, and Pierina is located in Ancash, near Lima, Peru's capital.

Minera Yanacocha's and Pierina's (Barrick Misquichilca) entry into production has resulted in a remarkable increase in Peru's gold output.

These two companies jointly account for 60.5% of the national production-38.7% for Minera Yanacocha, the largest gold producer company not only in Peru but in all of Latin America, and 21.8% for Barrick Misquichilca.