Peru Stocks Buenaventura, Cerro Verde, Panoro, Southern Copper

Foreign Minister Rafael Roncagliolo said Monday that the Peruvian government will honor its commitment to develop a "multilateral foreign policy," on the basis of consultation and regional integration.

Roncagliolo said this issue will be one of the priorities in the Ministry's international activity, seeking to achieve consensus and open dialogue with the countries of the region.

Roncagliolo added that "there will be changes and new emphasis" on the foreign policy, outlined by the government and the address to the nation of President Ollanta Humala.

He pointed out that a major goal in his new position will be to strengthen integration within the Union of South American Nations (UNASUR) and the Andean Community of Nations.

In this regard, he emphasized that the UNASUR and CAN summits held in Lima on the ocassion of President Humala's inauguration "allowed to focus on the Andean integration and the fight against inequality.

The Lima General Index was little changed at 21,959.67. The MSCI All Peru Capped Index fell 0.4 percent to 2,722.20.

Miners and industrial stocks declined after U.S. shares and metals slumped in New York, Jose Luis Bustamante, head of trading at Cartisa SAB, said in a telephone interview.

Southern Copper Corp. (SCCO) , Peru’s biggest copper producer, fell 3.7 percent to $34.30 Panoro Minerals Ltd. (PML) , a Canadian copper and gold exploration company, dropped 3.5 percent to 55 cents. Sociedad Minera Cerro Verde SA (CVERDEC1 PE), a unit of Freeport-McMoRan Copper & Gold Inc., slid 1.4 percent to $43.80. Cia. de Minas Buenaventura SAA (BVN PE), the country’s biggest precious-metals miner, fell 1.3 percent to $40.70.

Casa Grande (CASAGRC1 PE), Peru’s largest sugar producer and a unit of Gloria SA, declined 1.2 percent to 16.40 soles after futures fell for a third day in New York.

Peru to beef up state energy companies

LIMA - Peru Finance Minister Luis Miguel Castilla said Monday that the government is advancing in talks with mining companies on how best to increase taxes without affecting the sector's competitiveness.

"It is an important topic that requires a quick resolution," Castilla said in an interview with Radio Programas.

President Ollanta Humala took office on July 28 with promises to raise taxes on mining companies, which have been posting strong profits, thanks to record metals prices.

Investors have expressed concern that the initiative could affect planned investments of $42.5 billion in the sector this decade.

Members of Humala's Gana Peru party began discussions with the National Mining, Oil and Energy Society, or SNMPE, before the new government took office, Castilla said. "We are now in a technical phase and defining the different formulas to be able to reach the objectives that we have as a country," he said.

The government plans to use resources from the new tax to finance public works in areas that don't receive a regional mining tax. Half the income tax paid by mining companies goes to the governments of the regions in which they operate.

Mining companies contribute millions of dollars as a result of the tax every year, although about 80% of the funds are distributed to only eight of Peru's 24 regions, Castilla said. "It's going to be a tax regime that maximizes the state's resources, but without compromising the future of important investment projects," he added.

In early July, SNMPE President Pedro Martinez said that the mining society was willing to talk with the incoming Humala government, but that he didn't believe a windfall tax would be feasible. Instead, he pointed to an existing voluntary contribution program as a good model.

On Friday, Southern Copper Corp.'s (SCCO, SCCO.VL) parent company, Grupo Mexico SAB (GMEXICO.MX), said it is confident the Peruvian government will "maintain and provide its international competitiveness within the worldwide mining industry."

He spoke hours after Finance Minister Luis Miguel Castilla said modernizing public companies was important and state oil and gas company PetroPeru could be opened to private investment.

Peru's state-owned energy companies do not have the market share or international importance that Brazilian energy giant Petrobras or Chile's miner Codelco enjoy, and most Peruvian companies were privatized in the 1990s.

"When you look at economies like Colombia, Chile or Brazil you see a totally different situation," said Herrera at a press conference. "What we're looking at is allowing state companies to have a greater involvement in the management of the state."

Companies that could be reformed or expanded, possibly with the introduction of private capital, include PetroPeru and ElectroPeru, the state electricity company.

President Ollanta Humala swears in Cabinet

Ollanta Humala has taken office as Peru's president, pledging in his inaugural address to ensure that all Peruvians will benefit from the country's economic growth.

Addressing Congress after being sworn in Thursday in Lima, President Humala said “economic progress” and “social inclusion” must work together.

Mr. Humala was elected on promises he would more evenly distribute the country's mining wealth and the profits of the country's recent economic growth. Thirty percent of Peruvians currently live below the poverty line.

In the campaign, however, Mr. Humala downplayed his former leftist economic stance. He has sought to reassure foreign investors he will govern as a moderate, retaining two members from the administration of his predecessor, Alan Garcia. Julio Velarde stays on as central bank chief. A deputy finance minister, Luis Miguel Castilla, has been named finance minister. Both men are seen as closely tied to Peru's recent economic growth.

A number of South American leaders attended Thursday's inauguration ceremony, including the presidents of Argentina, Brazil, Chile, Colombia, and Ecuador. The secretary-general of the Organization of American States, Jose Miguel Insulza, and the U.S. ambassador to Peru were also expected to attend.

Mr. Humala's former mentor, Venezuela's leftist President Hugo Chavez, currently undergoing treatment for cancer, did not attend the ceremony.

Prime Minister Salomon Lerner Ghitis, 65, is a businessman who studied industrial engineering at Lima-based Universidad Nacional de Ingeniería. He was named general manager of Empresa Pública de Comercialización de Harina y Aceite de Pescado (Fishmeal and Fish Oil Marketing Authority) during the 1968-1975 government of Juan Velasco.

He served as deputy trade minister during the 1975-1980 administration of Francisco Morales. He became a leading member of the Transparencia election-watch association in 2001 and was president of Peru's Corporación Financiera de Desarrollo (Cofide) during the government of Alejandro Toledo.

Minister of Foreign Affairs, Rafael Roncagliolo Orbegoso, 67, is a sociologist and journalist who has been a professor at Peru's Diplomatic Academy and at Lima's Pontificia Universidad Catolica. Between 1982 and 1986, Roncagliolo was vice president of the association of investigations in mass communications and a member of the executive board of the world radio and television council.

He was also secretary general of Transparencia and has been a consultant to the InterAmerican Institute of Human Rights, UNESCO, UNDP, the OAS, IADB, and the Washington, DC-based International Foundation for Electoral Systems and the National Democratic Institute for International Affairs.

Minister of Economy and Finance, Luis Miguel Castilla, 42, was deputy finance minister during the 2006-2011 administration of Alan Garcia. He holds doctoral and master’s degrees in economics from Johns Hopkins University in the United States and graduated with honors from Montreal's McGill University.

He has worked at the Latin American Development Bank (CAF), the World Bank, Peru's Private Investment Commission (Copri), and the Inter-American Investment Corporation.

Minister of Energy and Mines, Carlos Herrera Descalzi, 66, is an engineer who held this post during the 2000-2001 transition government of Valentin Paniagua. He signed the initial contracts for the exploitation of the Camisea gas. He graduated from the Universidad Nacional de Ingeniería and was most recently dean of Peru's Colegio de Ingenieros.

Minister of Women and Social Development, Aida Garcia Naranjo, 60, studied education at Lima's Pontificia Universidad Catolica and has a master’s degree in political science and government from the same university. She worked at the Lima city council between 1990 and 1993.

She has been advisor to the Peasant Confederation of Peru, the Secretariat on Women's Affairs, and the National Center for Women Miners. She is author of a number of books on women in urban and rural settings.

Minister of Defense, Daniel Mora Ballon, 66, is a retired army general elected to Congress representing the province of Callao. He studied at the Ecole Militaire in Paris and led the Peruvian team for the Declaration of Itamaraty, in the peace negotiations led by Brazil following the Peru-Ecuador (Cenepa) war in 1995.

He has served as secretary general of Peru's Ministry of Transport and Communications and head of the National Intelligence Council (CNI) during the 2001-2006 administration of Alejandro Toledo.

Minister of Environment, Ricardo Giesecke Sara Lafosse, is a physicist and specialist in environmental issues. He has been deputy energy minister, coordinator for the Andean Community (CAN) in Peru and head of the Climate Change and Air Quality Unit of the National Environment Council (CONAM).

Minister of Production, Kurt Burneo Farfan, 50, studied economics at the Universidad Nacional Mayor de San Marcos and holds master's degrees from the University of São Paulo and Lima's Pontificia Universidad Catolica.

Burneo also has a doctoral degree in business administration from the ESADE Ramon Llull University. He has been deputy finance minister, central bank director and president of state-run Banco de la Nacion during the Toledo administration.

Minister of Foreign Trade and Tourism, Jose Luis Silva Martinot, is a former president of the Peruvian Exporters' Association (Adex) who recently said that he planned to "take full advantage of the free trade agreements signed by Peru with various countries around the globe, including the United States, China and the European Union. Silva ran Adex twice from 2007-2008 and from 2009-2010.

Minister of Interior, Oscar Valdes Dancuart, 62, is a former army colonel who retired in 1991 and since then has been in private business in the southern Tacna region, active in the local Chamber of Commerce and on the board of the Tacna-based Industrial Training Institution (Senati).

Minister of Justice, Francisco Eguiguren Praeli, is a constitutional lawyer who has a master's degree from Lima's Pontificia Universidad Catolica. He has been a professor and legal adviser on human rights and justice.

Minister of Health, Alberto Tejada Noriega, 54, is a physician and a former football referee. He was mayor of Lima's San Borja district from 2003 to 2010.

Minister of Labor and Employment Promotion, Rudecindo Vega Carreazo, 48, is a lawyer who served as minister of housing in the Toledo administration. He is a consultant on issues relating to decentralization, poverty reduction, regional development, water and sanitation, housing, urban development and environment.

Minister of Housing, Construction and Sanitation, Rene Cornejo Diaz is a businessman and former director of Peru's Private Investment Promotion Agency (ProInversion). He also served as executive secretary of mortgage lending fund Mivivienda from 2002 to 2004.

Minister of Agriculture, Miguel Caillaux Zazzali, is an engineer and livestock entrepreneur who recently headed the National Dairy Farmers Association.

Minister of Transport and Communications, Carlos Paredes Rodriguez, is a businessman who has a master's degree in business administration from ESAN. He also studied at the J.L. Kellogg Graduate School of Management in the United States. He is general manager of the Arequipa-based company Alprosa and director of the Arequipa Chamber of Commerce.

Minister of Education, Patricia Salas O’Brien, is a sociologist and member of the National Education Council. She has a master's degree in development strategies and social policies from Arequipa's Universidad San Agustín. She is a researcher at the Education Policies Institute of the Jesuit university Antonio Ruiz Montoya.

Minister of Culture, Susana Baca de la Colina, 67, is a singer of Afro-Peruvian descent. She has won global acclaim for her music, which mixes African and Andean rhythms, and for her work in preserving the cultural heritage of Peruvians descended from slaves.

Canada Deports Suspected War Criminal

Fourth person living in Canada illegally and identified by the federal government as a suspected war criminal has been arrested in the Greater Toronto Area.

Henry Pantoja Carbonel, originally from Peru, was arrested and taken into custody by the Canada Border Services Agency, Public Safety Minister Vic Toews and Immigration Minister Jason Kenney told reporters Wednesday at a news conference in Ottawa.

CBSA spokeswoman said Pantoja Carbonel, 53, was arrested on Tuesday. Three others identified by the federal government have already been taken into custody since last week, when Ottawa released the names of 30 suspected war criminals it says entered the country illegally.

"Canada will not be a haven for those who have been involved in war crimes or crimes against humanity," Toews said. "With the help of citizens, the suspects are being located, and they will face the consequences."

Toews would not give additional information on the allegations against the latest arrestee, saying the government's focus is to remove individuals who have been determined to be inadmissible to Canada.

Public Safety Minister Vic Toews announced Sunday that Manuel De La Torre Herrera, from Peru, was arrested July 25 in Toronto and has been deported, the Winnipeg Free Press reported. Herrera and 29 other people were listed on the Canadian Border Services Agency Web site as being in the country illegally and were accused of war crimes.

The 30 men were listed on the Web site because “the CBSA has concluded they’ve reached the end of their usual investigative techniques in finding individuals and therefore it was seen as a mechanism to see if they could be located through other means,” Toews said.

Five of the 30 men on the list have been arrested in Canada since the list was created last week.

“It has been both a surprise and a pleasure to see the volume and rapidity of responses from concerned Canadians across the country,” Toews said.

Critics of the CBSA say the men shouldn’t be tied to war crimes without facing trials. Amnesty International said that the men should be tried in Canada, as it is not guaranteed that they will even stand trial in their home countries.

“Some say we are wrongly accusing these individuals of crimes before they have been tried and found guilty in a court of law. In fact, we are not here to pass legal judgment on whether or not these individuals committed crimes,” Toews said. “The purpose of this list is to remove individuals who are here illegally who are inadmissible by reason of implication in war crimes or crimes against humanity.

Peru's New President Pacify the Rebel Heartland

Police in Bolivia arrested four Peruvian members of the Shining Path guerrillas on Monday for distributing pamphlets against the leftist government of President Evo Morales, an official said. "These four individuals were arrested while distributing materials relating to the national

government," said police chief Roberto Campos at a press conference in the Andean city of El Alto, near La Paz.

The police chief, who presented the four detainees, said the pamphlets warned Bolivians to say no to higher fuel prices and embrace Marxism, Leninism and Maoism.

They used the term "gasolinazo" to refer to President Morales' intention to raise fuel prices at an undetermined date.

Interior minister Sacha Llorenti said three of the detainees could possibly be deported to Peru, while the fourth has political refugee status and will meet with the National Council for Refugees Bolivia (CONARE) on Tuesday to assess his situation.

Some 70,000 people were killed between 1980 and 2000 as the Peruvian government crushed the Shining Path and a rival leftist guerrilla group, the Tupac Amaru movement, according to Peru's independent Truth and Reconciliation Commission.

In the run-up to the handover of power, Humala’s choice for defense minister, Daniel Mora, declared that the forthcoming government would eradicate “narco-terrorism” in Peru, getting rid of the remnants of the Shining Path (Sendero Luminoso) rebel group. He expressed the hope, like so many of his predecessors, that the new government would “solve this issue for good.”

The Shining Path was formed in the 1970s, and over the next two decades grew to pose a mortal threat to Peru’s government, embroiling the country in a conflict that left almost 70,000 dead. The organization went into decline after the capture of leader Abimael Guzman in 1992. Considered by many to be a spent force, the group, or factions associated with it, sprung back into action in the late 2000s, with a low-intensity campaign of attacks against the security forces that has killed at least 50 since 2008. It is now split into two relatively independent factions; one in Peru’s Upper Huallaga Valley and one in the Apurimac and Ene River Valley, known by its initials in Spanish as the VRAE.

Source: RPP

The VRAE is wild, remote territory in the center of the country, riven by mountains and jungle. It is also close to the birthplace of the guerrilla group, in the city of Ayacucho. The difficulty of policing this terrain, and the poverty and isolation of the some 130,000 people that live there -- 80 percent in poverty, according to the authorities -- make it ideal guerrilla territory. The area is neglected by the government, with soaring rates of illiteracy, and a general lack of electricity, infrastructure, and services. The VRAE also houses nearly a third of Peru’s coca crops -- the raw material used to manufacture cocaine. The Shining Path’s resurgence in the region has been propelled by the revenue from the cocaine industry. Profits from the drug trade have allowed them to gain a measure of popular support, as the rebels do not need to rely on extortion for their funding (a strategy that breeds ill-feeling among residents). Additionally, the rebels are perceived as supporting the coca economy, which many locals depend on for survival.

The Shining Path in the VRAE now support themselves by taxing coca farmers, escorting drug shipments for traffickers, alongside a variety of other activities like illegal logging. They are also thought to run their own coca plantations and cocaine laboratories. The U.S. State Department puts their numbers at some 200-300 members, down from more than 20,000 before Guzman's capture.

The government dismisses the current Shining Path guerrillas as mere “narco-terrorists” who have abandoned their political ideology. This appears to be more than propaganda; imprisoned Shining Path founder Guzman has dismissed the VRAE faction as “mercenaries,” who have thrown his Marxist-Leninist ideology “into the trash.”

The Shining Path remains an irritant to the Peruvian government, which has been unable to get rid of the remnants of this group and stop the steady drip of casualties in the state forces. Much of the rhetoric of Humala’s government sounds similar to that employed by the administration of his predecessor Alan Garcia. “It would be easy to turn one’s face and ignore the VRAE,” declared then-Prime Minister Javier Velasquez Quesquen almost two years ago. “But we have decided to assume the responsibility, the final liquidation of the remnants of terrorism and drug trafficking.” (Map source: El Pais)

The Garcia government also set out to end, once and for all, the Shining Path's dominance in VRAE. In 2008 the armed forces established the VRAE Special Command, made up of members of the army, marines, and air force. This unit had a degree of automony from the central command, and enjoyed a higher budget then previous forces in the zone. In 2009 they proposed to declare the VRAE a combat zone, in order to give the army extended powers, before being forced to abandon the idea in the face of opposition from locals.

Representatives of the outgoing governmnt claim that this strategy produced results; then-Defense Minister Jaime Thorne said recently that in Garcia’s five years in office, the army had managed to reduce the rebels’ “area of influence” from 34,000 to 5,000 square kilometers. However, the minister did not give details of where exactly these zones where located, or how they were calculated.

News from the VRAE would suggest, in fact, the government has made little measurable progress in driving back the rebels; in 2005, the year before Garcia came to power, there were 15,000 hectares of coca crops in the VRAE; now there are 19,700. Recent growth in coca cultivation has been mostly driven by the region. According to the United Nations (UN), the area under coca cultivation in the region increased 13 percent between 2009 and 2010, even as it dropped in the country’s other biggest producing zone and rebel base, Huallaga. Peru is on its way to becoming the world’s biggest coca producer, according to disputed UN figures.

Meanwhile the Shining Path have continued to make their presence felt, ambushing and killing five soldiers on the eve of the presidential elections in June.

Even the Garcia administration’s listing of its achievements in the zone seemed to be made from a defensive stance, in response to criticism of their failure to pacify the VRAE. Minister Thorne insisted that representatives of the U.S. and Israeli militaries had assured him that the VRAE was a very difficult zone to fight in, and that the only other regions with such tricky terrain were in “places like Afghanistan and Vietnam.” Even if, as Thorne claims, the rebels have been driven back by the new army command bases, its not clear how permanent this is. As a guerrilla group with several decades experience, the Shining Path knows how to fall back in the face of military presence and return when they are gone.

For former Defense Minster Roberto Chiabra, who served under Garcia’s predecessor, one problem of the last administration’s approach, which seems set to continue under Humala, is the definition of the issues facing the VRAE. “We must define who the enemy is,” he said. “It is not the remnants of terrorism, but drug trafficking.” It's possible that the focus on the Shining Path rebels, and their political past, is obscuring government efforts to combat what the group has become.

Humala, the new president, may be able to bring a fresh perspective and make a difference to the VRAE. As a former military man, he may enjoy some extra credit and trust from the armed forces. His links to coca growers' organizations may mean that he can pursue a more realistic and sensitive policy towards them, and perhaps succeed in breaking their links with the rebels. A “large majority” of the VRAE’s population depends on coca cultivation, according to a 2005 UN study, and so it will take more than eradication schemes or threats to persuade farmers to drop their coca crops. The new interior minister, Oscar Valdes Dancuart, has emphasized the economic factors in combating the drug trade in the VRAE, and said that the government must use “imaginative methods,” and develop infrastructure in those areas where crop substitution is not possible.

New Defense Minister Daniel Mora has also emphasized a more broad-based approach to security in the VRAE, saying that the security forces must work with the people and “address their needs,” while bringing in measures like tighter controls on drug precursor chemicals entering the zone.·

An association of the VRAE's mayors have come together to make a list of demands to be handed to the new president. Their requests range from bringing electricity to hundreds of rural communities and setting up a healthcare management unit in the region, to completing the asphalt on a mayor local thoroughfare. Humala might do well to listen to them.

Celebrating Peru's day

Afro-Peruvian folk singer Susana Baca has been named minister of culture in Peru for the new populist government of President Ollanta Humala, who took office last week.

Ms. Baca, whose CD “Lamento Negro” won a Latin Grammy award in 2002, is the first black Peruvian to be named a cabinet minister in that country since it gained its independence from Spain in 1821, and she provides another example of a recent South American trend to put artists in charge of government cultural policy. Previously, for example, the pop singer-songwriter Gilberto Gil served as culture minister in Brazil, and the actress-director Paulina Urrutia in Chile. Despite her new duties, Ms. Baca intends to go ahead with a tour of the United States and Europe scheduled to begin this month, according to her publicist, Jesse Cutler. The performances are to include one in New York City on Aug. 21, at the City Winery.

Fiestas Patrias started a week early at the University where I work. We had a special event the last day of class. The University provided students and teachers with a criollo treat of anticuchos (beef hearts marinated and barbecued), picarones (dough made with sweet potato and fried in the shape of a donut) and chicha morada, a sweet drink made of purple corn. Yum. Needless to say, the students were delighted, not only with the excellent food, but also because classes were cancelled that night, and, best of all, they looked forward to a long vacation.

In Barranco, my neighborhood, we celebrated as well. Red and white flags, the national colors, were flying from each of the houses as required by law. School children marched through the streets accompanied by music provided by their fellow students. Even the sun cooperated on July 28th since we had a bright, clear sunny day, which is most unusual in the dead of winter. That caused many people to come out in the afternoon and stroll along the malecon or around the main plaza.

At this time of year, I often see my neighbors cleaning and painting their houses. It is a local tradition to spruce up the neighborhood for the national holiday. In this climate, where it rarely rains, a fresh coat of paint really improves the appearance of the houses, some of which also get covered with graffiti during the year. As a result of one of my neighbor’s efforts, for example, the saddest looking house on our block now shines in a brilliant yellow with red trim. It looks great.

During the period of fiestas patrias, Lima is unusually quiet. Traffic is down dramatically and restaurants are not nearly as crowded. Many of our fellow citizens have fled the city, enjoying the opportunity to travel all over Peru. Those who stay behind, stay at home, often organizing family celebrations.

We are one of those families who stay at home. We want to avoid the traffic, higher prices and crowded conditions in our favorite locations outside of Lima. We’ll go another time.

In fact it is nice to be here right now. For me, one good reason is that on the 29th of July, there is always a military parade. I like to settle down in front of the television and watch the many units of the Army, Navy, Air Force and National Police pass by while listening to the martial music.

So, there were no hot dogs or firecrackers for me on Independence Day. Even so, fiestas patrias, is one of my favorite times to be in Peru.