April 17, 2014 / 5:10 PM / 6 years ago

Peru's gold output seen flat or falling again this year

LIMA, April 17 (Reuters) - Gold production in Peru, the world’s sixth biggest exporter of the precious metal, will likely either plateau or dip slightly this year compared with 2013, mining companies, analysts and the government said.

Gold output will fall by at least 4 percent in 2014 to between 4.4 million and 4.6 million ounces, according to company and analyst estimates.

But the government hopes it can repeat the same level of production posted last year of 4.8 million ounces, deputy mines minister Guillermo Shinno said.

“This is not going to be a year when we grow in gold production,” Shinno said. “But we hope with the expansion of smaller mines, we can maintain production.”

The Andean country’s production of the yellow metal has shrunk by a third since peaking at 6.7 million ounces in 2005.

Production has been softening as gold deposits dwindle at aging mines and explorations and new projects have stalled on approvals, community opposition and financing hurdles.

Barrick Gold’s Pierina mine wound down production in recent months and is in the process of closing.

Peru’s biggest gold mine, Yanacocha, controlled by Newmont Mining and junior partner Buenaventura , posted a 24-percent drop in output last year.

That trend will continue until output from Yanacocha stops altogether in coming years, and Newmont and Buenaventura’s Conga project, which would have offset the mine’s dipping output levels, remains derailed by local protests.

This year, Yanacocha will likely produce 980,000 ounces of gold, 3.8 percent less than in 2013 and far from the 3.3 million ounces it churned out in 2005.

Buenaventura’s financial manager, Carlos Galvez, said slow government permitting has kept the company from securing alternative deposits.

The mining ministry’s Shinno said President Ollanta Humala’s government is updating the permitting process.

“We are working with the environment ministry to create a rule that guarantees respect for the environment and also promotes investments,” Shinno said.

Gold makes up about a quarter of Peru’s exports, which are also dominated by other minerals, like copper and silver.

Last year, as the price of gold slipped about 30 percent, Peru posted its first trade deficit in more than a decade and clocked its slowest economic expansion since the global financial crisis.

As gold loses its luster in Peru, the government expects copper to help offset impacts on the local economy.

Peru is the world’s third biggest copper exporter, and the government expects it to double output of the red metal by 2016 as production at new mines ramp up. (Reporting by Teresa Cespedes, Writing by Mitra Taj; Editing by Marguerita Choy)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below