Thursday, June 03, 2004

Mining Gets the Tax: Bloomberg, BNAmericas, and Reuters reports that the Peruvian Congress "approved a controversial plan to charge mining companies a royalty of 1 to 3% of their sales," with a vote of 68-30 and 13 abstentions. The Lima Stock Exchange's president Rafael D'Angelo Serra gets quotes in both Bloomberg and Reuters and said "the stock declines wiped $250 million off mining stocks in an hour." Cerro Verde's "shares fell 9.75% before recovering after Thursday's vote to stand 0.91% down." Bloomberg quotes Congressman Victor Valdez, a member of the Congressional Mining Committee. BNAmericas gets quotes from Armando Mendoza, a political advisor to lawmaker Javier Diez Canseco, who was a prime sponsor of the bill in Congress. NOTE: BNAmericas says "Mining is the cornerstone of Peru's US$60bn economy, accounting for 50% of exports." ALSO: Reuters says that "in a separate resolution, Congress approved a scheme to divide the royalty revenue among local, provincial and regional authorities where the mining operations are based." A separate Reuters piece suggests that "Peruvian mining companies could take legal action" against this legislative action, according to Jose Miguel Morales, president of the private National Society of Mining, Energy and Petroleum. He appears to have his own strategy: "It's not a case of taking to the streets or burning tires or blocking roads, we have to use the legal means available to Peruvians to defend ourselves from this type of action." Separately, Reuters reports that Southern Peru Copper Corp. was trading "more than 4% lower on Thursday after Congress voted in favor of a controversial plan plan to charge miners a royalty." They are the only major mining corportation not to have "the so-called tax stability contracts that lock in unchangeable tax rates for long periods, meaning they will not be subject to the royalty." Still another Reuters story relates how the "big North American mining companies strongly hinted on Thursday that they might look elsewhere for gold, copper and other minerals following Peru's decision to charge them royalties." Cited were representatives of Newmont Mining ("Changes to the current tax regime could impact future investments in Peru") and Barrick Gold ("It will definitely affect the investment climate there"). SEE ALSO: an early Reuters story reported on how the deliberations began and a separate one filed at the start of the trading day.

FZevallos in Top Ten, cont.: Reuters has Fernando Zevallos' (and AeroContinente's) response to his being labelled a "drug kingpin" by the USA government. Said Zevallos, "The Chilean government and LanChile, hand-in-hand, are behind this. The objective is to destroy Aero Continente." The Associated Press and Reuters have several photographs of Zevallos' press conference held on a street across from Lima's U.S. Embassy. The New York Times includes part of yesterday's Associated Piece on Fernando Zevallos in their America's column today. ALSO: the New York Times includes Aerocontinente in an article on the industry in Latin America and says that it is being beat back by Lan Chile, "Latin America's most successful airline." It also reports that AeroContinente has already been hit hard this year by a strike, a Federal Aviation Administration ban on AeroContinente flights to the United States for 'significant safety issues,' and investigations into drug trafficking accusations against the airline's operators, the Zevallos family of Lima." Lan Chile and Marriot come together in a joint-marketing scheme, according to this press release. ALSO: Xinhua Net has their own take on the story and the Miami Herald runs an Associated Press piece (supplemented by their own reporting) on the Fernando Zevallos story. "In a heavy legal blow to a Peruvian airline mogul, the U.S. government placed him on its list of overseas drug kingpins Tuesday and froze the U.S.-based assets of Peru's largest airline and several related companies." The 'Drug Kingpin Act' denies access to the U.S. financial system and any transactions involving U.S. companies and individuals. Says the Herald: "Boeing airplane parts are now banned from [being provided] to AeroContinente to maintain its fleet of jets." Background: Peruvian investigators and the U.S. DEA believe ''the 3.3 tons of cocaine seized in Piura in 1995 represented approximately one half of a 7-ton shipment destined for Mexico and the United States." The Associated Press offers a photo of an AeroContintente airplane as well.

Rating the Economy: Fitch Ratings puts out a a new outlook on Peru: "the Rating Outlook on Peru's long-term foreign currency rating to Positive from Stable, on improving public and external finances, and reduced public financing vulnerabilities. The long-term foreign currency rating remains at 'BB-'. The long-term local currency (Peruvian Nuevo Sol) rating was affirmed at 'BB+' with a Stable Outlook." See also Reuters take on the report.

Refugee Program Praised: The United Nations news service reports on Francis M. Deng (Secretary-General Kofi Annan's representative to internally displaced persons, or IDPs) "praised Peru for the passage of a new national law prohibiting arbitrary displacement and clarifying the rights of those who have been forced to leave their homes by armed conflict or other causes." Deng "hailed President Alejandro Toledo and the Congress of Peru, where an estimated 600,000 people, mostly from indigenous communities, were displaced during the 1980s and 1990s. See the official press release from the United Nations. ALSO:Latinamerica Press also includes a piece on the "Law of the Displaced" and notes that this was one of the recommendations of the Truth and Reconciliation Commission.

JSilvaRuete Cleared in RDiez-Canseco Scandal: Dow Jones reports that Central Reserve Bank President Javier Silva Ruete "wasn't responsible for a tax break that benefited the family of the girlfriend of former Vice President Raul Diez-Canseco." Background: "Congress' investigation was tied to one of Silva Ruete's terms as finance minister, when he co-signed a decree giving the tax breaks."

Shhhh! More Military Maneuvers: The Sun, a newspaper in Illinois, includes notes about "the Peruvian Navy's Silent Forces Exercise" which included the participation of the USA Navy and which "allows American forces and foreign militaries to train together in an effort to deter further terrorist acts." ALSO: These excercises included anti-submarine warfare training with France and with host country Peru.

Copa America News: The Associated Press offers several photographs of "workers prepar[ing] the field at Peru's National Stadium in Lima" after Copa America organizers "decided on May 25 to use the 1950 stadium to open and close the July tournament instead of Monumental Stadium _ one of the continent's most modern venues." Reuters offers an additional photo. Reuters also has photos of a Peruvian "worker" purchasing Copa America soccer tournament tickets as they went on sale yesterday.

Petroperu Can't Privatize: Dow Jones reports that Petroperu "cannot be privatized and has been authorized to embark on exploration and exploitation activities," according to a law published in El Peruano. Says Petroperu President Alejandro Narvaez: "We could palliate the effects of the current price increase if we had an integrated business. If we had wells that allowed us to obtain crude at the production cost, the impact would be much less on the consumer. We would also contribute more through income tax."

Markham Exhibit: The UK's Independent reports on a new exhibition at the Royal Geographical Society which includes Clements Markham's archives. He is a previous Society president. Included in the exhibit: his map of "The basin of the Amazons" which was drawn up on an expedition to South America between the 1850s and 1860s. "The aim was to seek out the cinchona tree from which quinine - the best treatment for malaria available at the time - could be extracted. Markham's pen and ink map, measuring 75cm by 50cm (30in by 20in) and folded in four, was drawn in the 1850s. But his comments on the aboriginal Indians he meets on his travels are perhaps most revealing. ... His comments, penned in spidery handwriting on the map and typical of the era, described the Cocamillas Indians of northern Peru as "lazy, drunken, good boatmen."

The 'Other' World Cup: The Korea Times reports on a Peruvian team's participation at the first Migrant Worker's World Cup Soccer Championship hosted by the Uijeongbu Migrant Worker's Center at the Uijeongbu Complex Stadium. "The opening ceremony started at 11 o'clock after the first game of the tournament between the Myanmar and the Korean team. The Uijeongbu city mayor Kim Mun-won and Peruvian consul to South Korea Wilbert Haya took part in the ceremony."

SMulanovich is #1, cont.: The Los Angeles Times catches up with Sonia Mulanovich's victory at the Roxy Pro in France "with lots of sets, rips and super-consistent conditions" and who now holds "a pretty whopping lead in the WCT standings."

Eating in the USA: The Orlando Sentinel reviews positively La Granja, and the Houston Press cheers on Pezcalato.

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