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Latest News in Peru / Archive for Mining & Energy

Mining & Energy | July 27, 2011 [ 12:33 ]

600,000 new natural gas connections for households in Lima

Caros Herrera (Photo: El Comercio)
Carlos Herrera Descalzi, Peru’s next Minister of Energy and Mining, has stated that there would be about 600,000 new connections of natural gas in Lima households, in the next five years.

"The implementation of natural gas connections in homes has been very low, there are only 50,000, so the goal is to increase that by ten or twelve times, 500 thousand or 600 thousand household connections in five years," he told Andina news agency.

He explained that in the past weeks the transition committee for the Ministry of Energy and Mining (MEM) has been in contact with Cálidda Gas Natural del Perú, a company that is in charge of the natural gas distribution system in Lima and Callao.

These conversations were to take stock of the amount of natural gas and to evaluate possible alternatives in order to increase household connections.

"It is a coincidence that those with higher consumption of natural gas somehow take over costs that would accrue to those who consume less," he declared.

Herrera argued that the industry should participate more in common costs, in order to ease rates for residential consumers.

He stated that he did not plan on applying a cross-subsidy, but simply a cost allocation methodology, as the issue was about shared networks.

"We need to consider that the benefit for older consumers is very large. Then depending on the method, which need not necessarily be a subsidy, the costs can be spread in terms of benefit," he said.

He noted that one possibility would be that big industries would pay a little more to help the shared infrastructure, so that infrastructure costs for the residential consumers would be lower.

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Mining & Energy | July 25, 2011 [ 17:15 ]

Lupaka Gold completes 8 drill holes on Crucero project in Puno


Drilling Works at Lupaka's Crucero gold project, located in Puno, southern Peru. (Photo: Lupaka Gold website)
Canadian-based Lupaka Gold Corp. reported it has completed eight drill holes and over 2,700 metres since commencing the 2011 drill program on its Crucero Gold Project, located in Puno. The company added it has received assay results on the first three drill holes and is waiting on results for the remianing five holes.

Two drill rigs are actively drilling on the Crucero Gold Project site with a total of 11,000 metres planned to be drilled by December 2011.

The results have extended the northern boundary and the depth of known mineralization of the envelope at the A-1 Zone.

The 2011 drill program is focused on resource expansion at the A-1 Zone and investigating other identified anomalies on the 5,500 hectare claim area.

Eric Edwards, President and CEO of Lupaka Gold said dilling is scheduled to commence on the first of the other identified anomalies by the end of August.

"We continue to demonstrate the continuity of mineralization and gold grade within the A-1 Zone at the Crucero Gold Project. The results returned in hole DDH-41 are compelling in that the hole is located outside of the existing resource envelope, we are growing the boundaries of the known mineralized envelope to the north," he said.

Edwards said DDH-21 is also significant in that we drilled to a depth of 388.05 metres and bottomed in mineralization, with the final 13.05 metres averaging 1.56 g/t gold.

"The A-1 Zone mineralization outcrops at surface, and this result extends and leaves open the ultimate depth of mineralization at Crucero," he added.

Lupaka Gold Corp also reports that, on July 14, 2011, it completed the third acquisition payment, in the amount of US$3.0 million, for its 60% interest in Minera Pacacorral (MP) under the purchase agreement dated July 23, 2010.

MP is the Peruvian company that holds a 100% interest in the nine claims that comprise the Crucero property. The purchase agreement also grants the company an option to acquire the remaining 40% interest in MP at any time until July 2015.

The fourth and final acquisition payment for the company's 60% interest in the amount of US$3.0 million is due on July 15, 2012. Pursuant to an agreement between the company and one of the vendors, the company is entitled to satisfy US$750,000 of the July 15, 2012 payment by issuing common shares of the company in lieu of cash.

Lupaka Gold is aggressively exploring and developing the Crucero Gold Project, its 5,500 hectare gold property located in southern Peru.

The company, based in Vancouver, Canada, is project operator and holds a 60% indirect interest in the property and has an option to acquire the remaining 40% interest in MP at any time until July 2015.

Since commencing active exploration in April 2010, the Company has reported a NI 43-101 compliant gold resource.

In addition to the existing resource, Lupaka Gold has identified several exploration targets within the Crucero Property that display similar anomalous characteristics.

Lupaka Gold is led by a strong management team with the proven ability to develop, finance and operate mining projects. The company completed an initial public offering of its common shares and warrants on the Toronto Stock Exchange (TSX) on June 28, 2011.

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Mining & Energy | July 25, 2011 [ 10:02 ]

Peru will respect existing mining contracts, says next minister

Carlos Herrera Descalzi Photo:Andina/ Juan Carlos Guzmán Negrini)  
Carlos Herrera Descalzi, recently appointed Minister of Energy and Mining, has stated the new government will respect contracts and will focus on the negotiation of commitments in the mining sector.

According to an article in Andina, Herrera said that Ollanta Humala’s administration would not break commitments or contracts entered into by the previous administration, be it good or bad.

"Contracts must be respected because it is essential for stability. The country is like a person, if he doesn’t keep to his word or commitment, he loses the credit he needs to continue in life," Herrera said.

"Laws and contracts also promote the country," he said in a statement to channel ATV.

Herrera said that the new government would use legal channels to ensure domestic demand for gas is met, using gas from Block 88.

He said the state should give different opportunities for dialogue in the mining sector, in order for communities to understand the benefits of mining.

Furthermore, Herrera said that this should be accompanied by environmental impact studies carried out with "professionalism and seriousness."

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Mining & Energy | July 22, 2011 [ 10:09 ]

Peru approves plans for Camisea pipeline expansion

 Camisea gas (Photo: Andina/Archive)
The plan was presented by the Transportadora de Gas del Peru group (TgP), who plans to build two new lines, parallel to the existing ones, to bring more natural gas from Cusco to Lima.

According to the article, published in Andina, the project carries with it an investment of about $600 million.

The expansion project would increase transport capacity to 1.2 billion cubic feet per day of natural gas, according to the Ministry of Energy and Mining.

The Camisea pipeline, which carries gas from the Camisea field, in the province of Cusco, to the Peruvian coast, currently transports 500 million cubic feet per day.

The expansion of the pipeline will help meet growing domestic demand for natural gas, which has risen sharply in recent years. According to experts, the swell in demand is due to increased use by local industry and vehicular transportation.

Peru’s mining industry - the second largest producer of copper and silver, in the world – also requires natural gas for its operations.

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Mining & Energy | July 20, 2011 [ 15:05 ]

Mining sector employment in Peru jumped 19.5% in Jan-May 2011


Mining In Peru (Photo:Andina/Archive )
Mining sector employment spiked 19.5% in January and May 2011, thanks to investments made in exploration and production activities, reported Peru’s Ministry of Energy and Mines (MEM).

This year a total of 169,121 people throughout 22 regions got a job in this sector in the mentioned period.

According to MEM's monthly bulletin, mining investment rose 68 percent between January and May this year, totaling about US$2.5 billion.

The largest investments during the first five months of 2011 were made by Xstrata Tintaya (17.2%), Xstrata Las Bambas (13.6%), Yanacocha (10.2%), Antamina (8.1%) and Chinalco Peru (7.5%).

Cusco became the region which attracted the highest investment with roughly US$395 million (16.21%).

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Mining & Energy | July 20, 2011 [ 9:36 ]

Peru could have an energy shortage in 2012

Pedro Sánchez, Minister of Energy and Mining (Photo: Andina/Victor Palomino )
Pedro Sánchez, Minister of Energy and Mining, has stated that Peru could experience an energy deficit next year and might have to import electricity from Ecuador, to offset any lack of supply in the northern part of the country.

An article in Andina states the shortage could be due to problems with drought and lack of rain.

Sánchez told reporters, that energy rationing would occur "in the summer of 2012, during which we could import energy from Ecuador without any problem."

In Peru, 51% of the total energy produced is obtained from hydropower. The remaining 49% comes from coal, oil and natural gas sources.

Sánchez said the government was building a 500 kV interconnected system that would link the northern region of Lambayeque to the south ending by 2013.

The minister explained that in cases of drought, the Government had already authorized the rental of power generation equipment for about 80 megawatts.

Peru has a bilateral interconnection agreement with Ecuador and is developing a new electrical exchange plan with Chile, Colombia and Ecuador to help avoid supply crises in the region.

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Mining & Energy | July 19, 2011 [ 16:17 ]

Minera IRL shedueled to invest $170 million for gold mine in Puno, Peru

Image from Ollachea Pre-Fesability Study  (Photo: Minera IRL )

Gestion reports that Minera IRL has announced the company has scheduled construction of its Ollachea project, located in Puno, by the end of 2014. Capital investment for the project is estimated to be $170 million.

A pre-feasibility study carried out by AMEC determined that the operating cost during the life of the mine is estimated at $436 per ounce of gold.

It is estimated that the mine will yield 9.5 million tons of minerals.

Courtney Chamberlain, president of Minera IRL, says that results from the study gives strong credence to a substantial, economically robust, long-life gold project at Ollachea.

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Mining & Energy | July 18, 2011 [ 14:18 ]

Peru climbs 9 spots on best oil and natural gas investments survey

Natural Gas Refinery (Photo: Andina)
Peru is now ranked as the 76th best location for investment in oil and natural gas, according to the 2011 Fraser Institute Global Petroleum Survey. Peru had placed 85th on the list the previous year.

According to the survey, Peru has created a climate conducive to investment in oil and gas through the adoption of rules and laws that provide stability and investor confidence.

Furthermore, the survey noted that Peru has a good potential for the development of oil and gas, coupled with a climate of high respect for contracts with investors.

Peru saw an investment of $ 6.2 billion in exploration and production of petroleum and natural gas, during 2006 to 2011 - 290% higher to the amount invested from 2001 to 2005.

Of this investment, $2.1 billion was went to exploration and $4 billion toward production.

A total of 502 respondents representing 478 companies took part in the survey.

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Mining & Energy | July 12, 2011 [ 9:39 ]

Peru and Doe Run at negotiating table

Doe Run's mine (Photo: Andina)
The Peruvian government and the American mining corporation, Doe Run, are currently negotiating the resumption of operations in La Oroya, amid environmental concerns.

In a report published in Gestion, the Peruvian ambassador to the United States, Luis Valdivieso, said Doe Run and Peru are exploring the legal means by which the company would resume mining in the community of La Oroya, in the Junin province.

Peru’s contract with Doe Run, which started July 27, 2010, gave them ten months to be in financial compliance with the country’s Program of Adaptation and Environmental Management (PAMA). The company did not meet this deadline.

“This is not a political problem,” Valdivieso stated, “but rather a legal problem, and we are handling it through legal means.” Furthermore, he added that the embassy is only monitoring what is actually going on, and informing Lima.

Doe Run’s mining operation in La Oroya have been heavily criticized for its indifference to the local environment and the health of La Oroya’s citizens. The environmental watchdog group, the Blacksmith Institute, lists La Oroya as one of the ten most polluted cities in the world.

The ambassador also noted that the New York-based holding company, the Renco Group, is currently mounting an “impressive lobby” before the U.S. Congress to protect the interests of their subsidiary, Doe Run Peru, which is currently in bankruptcy negotiations with its creditors.

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Mining & Energy | July 11, 2011 [ 14:46 ]

Peru enjoys 68 pct growth in mining investment

Peru’s Ministry of Energy and Mines announced Monday that from January of this year to May, investment in the mining industry has increased 68%, with $2.43 billion invested this year alone.

As quoted in Andina, Henry Luna, Promotion Director of the Ministry stated “This year, the mining sector continues breaking records and for first time we are going to exceed the USD $4 billion registered last year.”

Luna, speaking at an international of local and international mining companies, mentioned that minerals, both metallic and non, comprise 62% of Peru’s total export market. Meanwhile, only 0.78% of Peru is currently being used for mining, while an additional 0.27% of the country is being explored for its potential in mineral resources. Luna believes that mining within Peru can be extended up to 10% of the nation’s territory.

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