Tuesday, June 15, 2004

Camisea Spigot Turned On: Several reports by BNAmericas and one by Dow Jones update the news on the Camisea project. BNAmericas reports that the "Camisea natural gas project has started producing natural gas liquids that are unable to be processed because the Pisco separation plant is not yet finished," according to the Minister of Mines and Energy Jaime Quijandría. Camisea "is on schedule to start delivering gas to Lima on August 9." Separately, BNAmericas reports that "Peru's government expects to sign an agreement in one month with the Camisea upstream consortium for an exploration and production contract on block 56 after it reached an agreement on royalties," according to a Peruvinversion spokesperson. ALSO, BNAmericas reports that the Peruvian subsidiary of Argentine energy company Petrobras Energía "aims to invest US$97.7 million to drill 51 wells in block X in Peru's northwestern Talara area during the next seven years," according to a spokesperson for Perupetro. Finally, Dow Jones reports that "Peruvian government and companies developing the Camisea natural gas project have fulfilled conditions set out by the Inter-American Development Bank for a loan disbursement for the project," according to Minister Quijandria. Background: In September 2003, after several delays, "the IDB approved a $75 million loan and a $60 million syndicated loan for Transportadora de Gas del Peru to support the transportation component of the Camisea project." ALSO: According to Quijandria, the Andean Development Corp. will separately disburse $50 million for the project shortly. The Camisea project has become the flagship of President Alejandro Toledo'a government."

Who Is Buying the Beer? Reuters reports that "a $43 million block of ordinary shares in Peruvian brewer Union de Cervecerias Backus & Johnston changed hands on Monday at a price 41% above the stock's closing price on Friday," according to market sources. "The buyer and seller were not known." Just Drinks headlines their story, "Massive mystery share transaction for Backus."

Trade, Trade, Trade: The Associated Press reports on the second round of negotiations of the U.S.-Andean Countries Free Trade Agreement at the Hilton Atlanta hotel. "U.S. trade officials want to craft a trade agreement with those countries to pave the way for a larger FTAA deal that would include virtually every nation in the Western Hemisphere." The Associated Press offers a photograph of Ministry of Agriculture employees Julio C. Paz Cafferata and Maria Elena Rojas. NOTE: Paz is the co-author of 'Farming Prices Policy Options in Peru: The case of groups of prices.' MEANWHILE, Reuters offers a group photograph that includes Vice President David Waisman among others, with U.N. Secretary-General Kofi Annan and Secretary-General of UNCTAD Rubens Ricupero at the United Nations Conference on Trade and Development in Sao Paulo. (The caption incorrectly names Ana Vilma Albanez de Escobar as a vice-president of Peru instead of El Salvador.)

Macro/Micro Econ:
- Bloomberg and Dow Jones report that Peru's economy "expanded in April for a 34th month, led by increased metal production in the country's copper, gold and iron mines. The $61 billion economy grew 3.28% in April, compared with growth of 5.5% in March and the lowest figure since December," according to the National Statistics Institute. IN SPANISH: See the INEI report.
- BNAmericas interviews Sebastian Briozzo (Standard & Poor's analyst) on Peru's banking sector who states that, "after several difficult years Peru's banking sector is today in a healthy financial shape and very liquid." NOTE: "Briozzo also believes the banking sector should seek to increase its focus on the many millions of low-income individuals as well as micro and small businesses that do not have access to the banking sector today."
- Reuters reports that Peru's Central Bank "abandoned another certificates auction on Monday, its second in a row and an unusual move prompted by the fact investors were offering rates the bank considered too high, dealers said. ... In May the Treasury scrapped an auction of domestic bonds for the same reason, but in its next auction, successfully placed 110.4 million soles in bonds."
- The Inter American Economic Council announced in a press release the organization of the 'Business Roundtable' as part of OAS General Assembly Meeting in Quito. "The IAEC is dedicated to promoting better government policy making by providing a forum for direct interaction with the private sector. The purpose of the Business Roundtable was to provide a forum for high level public-private discussions and centered around the theme of (Economic Growth and Development in the Andean Region." Minister of Foreign Relations Jose Manuel Rodriguez participated in these meetings.
- Dow Jones reports that "Peru's overall cement sales in May fell 1.5% to 340,113 metric tons from the same month a year before," according to the National Association of Cement Producers.
NOTE: "Cement production, an indicator of domestic demand, is a key component of activity in the construction sector." This story also reports on the unemployment rate and consumer price index.

More Mining:
- Dow Jones reports that "the bidding for the Las Bambas copper project will go ahead as planned on July 23 regardless of a congressional bill that might impose additional royalties on the project," according to Minister of Mining and Energy Jaime Quijandria. "The idea is not to change the date but to maintain it because the bidders are still interested," Quijandria said at a meeting with the foreign press association. Fourteen companies are 'prequalified' to bid for the project, although two of those, Southern Peru Copper Corp. and Barrick Gold Corp., have since dropped out. "Southern Peru Copper Corp. cited the proposed royalties for its withdrawal, while Barrick pulled out due to low gold grades."
- The World Socialists Web Site reports that "striking iron miners at the mine owned by Shougang Iron Peru rejected an agreement negotiated by their union leaders prompting management to declare an impasse, setting the stage for Peruvian authorities to intervene in the negotiations." The Ministry of Labour "is expected to present its own proposal this week, which is widely expected to be very similar to Shougang Iron’s latest offer."
- Tinka Resources announces in a press release that they have "staked five claims totalling 5,000 hectares, known as the Demetrio Project. The project is located between the Peruvian departments of La Libertad and Cajamarca, within the Pataz mining district, 26 km northwest of the Poderosa gold mine (100,000 oz annual production) and 510km north of Lima. The Demetrio Project is the second project to be acquired under the Company's exploration alliance with Sierra Peru."
- Brett Resources announced in a press release their acquisition of "up to a 90% interest in the El Inca project, located in north-central Peru. ... El Inca is located 40 kilometres southeast of Barrick's Alto Chicama project and 15 kilometres southwest of Inca Pacific's Magistral copper-molybdenum deposit, along a northwest-trending corridor hosting many prominent precious and base metal deposits."

Copa America, Inspections: The Associated Press offers photographs of Mansiche Stadium in Chiclayo as stadiums are being inspected by Conmebol officials in advance of the Copa America which will be hosted by Peru July 6-26.

How Much Coca in Your Tea? The Chicago Sun-Times reports on coca tea. (Agence France Press also reports on the story.) "The Illinois Court of Appeals ruled [an investigator with the Cook County sheriff's department]should not have lost her job in 2001 because the positive test result probably didn't come from cocaine, but instead from the tea she'd been drinking." Charmaine Garrido, the wife of a Chicago narcotics officer, said she drank "a significant amount" of the coca-tinged tea, which she got from Peru, just before her drug test. Though the sheriff's merit board didn't buy it -- and fired her -- the judges ruled the small traces of cocaine metabolites in Garrido's system were more likely to have come from tea than drugs." The ruling is not yet on the Courts' web site. Separately, Agence France Press offers a photograph of a "man chews coca leaves during a protest in Lima."

De Soto in DC: The Washington Times reports that Hernando de Soto will participate in a discussion on democracy and the Middle East in a forum tomorrow, organized by the Institute for International Economics.

Trafficking in People: The USA State Department released their 'Victims of Trafficking and Violence Protection Act of 2000: Trafficking in Persons Report' and included Peru (near the end in this section) in 'Tier 2 Watchlist' for the first time. "Peru is a source country for women and children trafficked internally for sexual exploitation. Most Peruvian victims of internal trafficking are girls forced or coerced into prostitution in nightclubs, bars, and brothels. Some victims are girls trafficked as domestic servants. Most internal trafficking networks move girls from rural to urban areas; traffickers recruit victims through local, informal, and family-based contacts. Peruvians have also been trafficked to Western Europe, particularly Spain. Illegal migrants, some of whom may be trafficked, also transit Peru. More complete information on trafficking, pointing to a significant number of victims, has made it possible to include Peru in this report for the first time."

Fishing 1000 Years Ago: The University of Maine announced in a press release refers to 'Geoarchaeological evidence for multidecadal natural climatic variability and ancient Peruvian fisheries,' an article in the new Quaternary Research Journal (the new issue is not yet online). "Old fish bones can tell scientists about more than what people used to eat. They can also provide clues to the climate in which those people lived. ... With data gleaned from excavations in the ancient village of Lo Demás just south of modern day Lima, the researchers reported that a shift from anchovy to sardine abundance occurred at about 1500 AD." NOTE: "Native people used the site to gut fish and hang them to dry. Because of the dry climate, the bones are well preserved. We found the post holes and the drip lines in the soil above the racks where the fish were hung. The soil was still saturated with fish oil. There were 500-year-old pottery shards that still smelled like rotten fish," according to the lead researcher Daniel H. Sandweiss. See also Sandweiss' Peruvian research on Quebrada Jaguay, "the oldest known fishing site in the new world."

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