Enough with the electionBack in February I was very worried about the election, I took it upon myslef to do some research on the political and economic climate in Peru NOW and over the past 20 years.
For all you people here worried about the election outcome here are some facts...
- The mining industry is Extremely important to the economy of Peru. To give you an idea of how important take a look at this power point presentation created by the MINISTRY OF MINES of Peru. It will show you just how extensive mining is in Peru and how important it is to the whole country. https://www.minem.gob.pe/archivos/dgm/inversiones/exposiciones/MC.ppt
- Newmont mining has been exploring and mining the Yanacocha mine since 1986. During that time there have been presidents (including Alan Garcia, one of the run-off candidates) that make Ollanta Humala seem like a boyscout.
- After (or around the same time as) Humala's failed coup in 2000, the Peruvian constitution was changed to prevent a president from serving consecutive terms.
- After the recent elections, it appears so far neither the peruvian congress nor the parliament show a clear balance of power. in the Congress Humala's "Union for Peru" has 21% after 60% count, Garcia's "Peruvian Arista Party" is .5% behind and Flores' "National Unity Party" has 20.5% in the congress. there will likely be 3 to 4 other fringe parties represented in the house. Statisitcs are similar for the peruvian Parliament.
Now based on this information, I have come to the conclusion that
a.) Complete nationalization of the mining industry in Peru is virtually impossible given that they need foreign expertise and also cannot afford to shoot themselves in the foot. Humala simply said this to rally the poor and uneducated behind him.
b.) Humala has and will say anything to sway the poverty vote in his direction. At the beginning of the campaign he was considered a fringe candidate. He’s a politician. Politicians do that. Name one Prime ministerial candidate in Canada who did what he said he was going to do.
c.) At worst, foreign mining companies will be forced to pay royalties for any minerals mined. BIG DEAL, they should be paying hefty royalties.
So, as I have said many times before as far as I am concerned and in my humble opinion, the election is a non-issue, zilch zero nada!! Yes there are political issues but companies mine around the world and deal with political instability everywhere. The big kicker here is Peru NEEDS mining and relies on it more than most countries in the world. If they want to take a bigger peice of the pie, in my mind they are perfectly entitled to. Don't confuse the polical rhetoric of a desparate candidate with reality because logically it doesn't make sense.
The most important thing we need to worry about here is finding gold.