Posts Tagged ‘Peru’


In Peru back in 2008, junior miners – those companies who rely largely on capital markets for finance – proved to be the canaries down their own mines who warned of the credit crunch.
Juniors had flooded into the market to join a frenzy of exploration, attracted by a heady mix of soaring commodity prices, cheap credit, China-like rates of economic growth and Alan Garcia’s pro-investment policies. But, true to hot money form, they had already begun a rapid exit by the time Lehman Brothers fell and the commodities boom ended.
Now juniors are coming back, in a more orderly fashion.
They have been attracted, in part, by Peru’s economic recovery: GDP growth has hit double figures in recent months, and is forecast to be as high as 8 per cent for 2010 as a whole.
Credit is also attainable once more. Gonzalo de Rosa, junior-mining analyst at Banco de Credito, told beyondbrics:

As the crisis passes, [juniors] have been more actively getting more credit facilities; they can do private placements. I don’t think that’s going to be an issue for them in the next few years.
As prices begin to present a positive trend they’re going to be gain more appreciation in the market.

Some juniors have a headstart now, with social and environmental impact assessments approved before the downturn. Yet the increase in junior investment is not as steep as it was two years ago.
Alonso Segura, chief economist at Banco de Credito, points out the juniors’ challenge:

One thing is betting on the sovereigns of an investment grade country which is a star performer in the region, a medium-sized economy, or buying bonds of a very well rated company – a very different issue is buying bonds of a junior company, which is basically going to a casino.

Casinos or not, junior miners are certainly back in vogue

Peru: junior miners are back | beyondbrics | FT.com

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High in the Andes, Keeping an Incan Mystery Alive

August 16, 2010

SAN CRISTÓBAL DE RAPAZ, Peru — The route to this village 13,000 feet above sea level runs from the desert coast up hairpin bends, delivering the mix of exhilaration and terror that Andean roads often provide. Condors soar above mist-shrouded crags. Quechua-speaking herders squint at strangers who arrive gasping in the thin air.
Rapaz’s isolation has allowed it to guard an enduring archaeological mystery: a collection of khipus, the cryptic woven knots that may explain how the Incas — in contrast to contemporaries in the Ottoman Empire and China’s Ming dynasty — ruled a vast, administratively complex empire without a written language.
Archaeologists say the Incas, brought down by the Spanish conquest, used khipus — strands of woolen cords made from the hair of animals like llamas or alpacas — as an alternative to writing. The practice may have allowed them to share information from what is now southern Colombia to northern Chile.
Few of the world’s so-called lost writings have proved as daunting to decipher as khipus, scholars say, with chroniclers from the outset of colonial rule bewildered by their inability to crack the code. Researchers at Harvard have been using databases and mathematical models in recent efforts to understand the khipu (pronounced KEE-poo), which means knot in Quechua, the Inca language still spoken by millions in the Andes.
Only about 600 khipus are thought to survive. Collectors spirited many away from Peru decades ago, including a mother lode of about 300 held atBerlin’s Ethnological Museum. Most were thought to have been destroyed after Spanish officials decreed them to be idolatrous in 1583.
But Rapaz, home to about 500 people who subsist by herding llamas and cattle and farming crops like rye, offers a rare glimpse into the role of khipus during the Inca Empire and long afterward. The village houses one of the last known khipu collections still in ritual use.
“I feel my ancestors talking to me when I look at our khipu,” said Marcelina Gallardo, 48, a herder who lives with her children here in the puna, the Andean region above the tree line where temperatures drop below freezing at night and carnivores like the puma prey on herds.
Outside her stone hut one recent morning, Ms. Gallardo nodded toward the stomach lining and skull of a newly butchered llama drying in the sun. She shared a shred of llama charqui, or jerky. “The khipu is a jewel of our life in this place,” she said.
Even here, no one claims to understand the knowledge encoded in the village’s khipus, which are guarded in a ceremonial house called a Kaha Wayi. The khipus’ intricate braids are decorated with knots and tiny figurines, some of which hold even tinier bags filled with coca leaves.
The ability of Rapacinos, as the villagers are called, to decipher their khipus seems to have faded with elders who died long ago, though scholars say the village’s use of khipus may have continued into the 19th century. Testing tends to show dates for Rapaz’s khipus that are well beyond the vanquishing of the Incas, and experts say they differ greatly from Inca-designed khipus.
Even now, Rapacinos conduct rituals in the Kaha Wayi beside their khipus, as described by Frank Salomon, an anthropologist at the University of Wisconsin who led a recent project to help Rapaz protect its khipus in an earthquake-resistant casing.
One tradition requires the villagers to murmur invocations during the bone-chilling night to the deified mountains surrounding Rapaz, asking for the clouds to let forth rain. Then they peer into burning llama fat and read how its sparks fly, before sacrificing a guinea pig and nestling it in a hole with flowers and coca.
The survival of such rituals, and of Rapaz’s khipus, testifies to the village’s resilience after centuries of hardship. Fading murals on the walls of Rapaz’s colonial church depict devils pulling Indians into the flames of hell for their sins. Feudal landholding families forced the ancestors of many here into coerced labor.
Rapacinos have also faced more recent challenges. A government of leftist military officers in the 1970s created economic havoc with nationalization, sowing chaos exploited by the Maoist guerrillas of the Shining Path who terrorized Rapaz into the 1990s, effectively shutting it off from significant contact with the rest of Peru.
But throughout it all, perhaps because of the village’s high level of cohesion and communal ownership of land and herds, Rapacinos somehow preserved their khipus in their Kaha Wayi.
“They feel that they must protect the khipu collection for the same reason we feel that we have to defend the physical original of the Declaration of Independence and the Constitution,” Professor Salomon said. “I’ve heard people say, ‘It’s our Constitution, it’s our Magna Carta.’ ”
Despite Rapaz’s forbidding geography, changes in the rhythm of village life here are emerging that may alter the way Rapacinos relate to their khipus.
About a year ago, villagers say, a loudspeaker replaced the town crier. And a new cellphone tower enables Rapacinos to communicate more easily with the outside world. Those changes are largely welcome. More menacing are the rustlers in pickup trucks who steal llamas, cattle and vicuñas — Andean members of the camel family prized for their wool.
The most immediate threat to the khipus may be from Rapaz’s tilt toward Protestantism, a trend witnessed in communities large and small throughout Latin America. About 20 percent of Rapacino families already belong to new Protestant congregations, which view rituals near the khipus as pagan sacrilege.
Far from Rapaz, the pursuit to decipher khipus faces its own challenges, even as new discoveries suggest that they were used in Andean societies long before the Inca Empire emerged as a power in the 15th century.
Scholars say they lack the equivalent for khipus of a Rosetta Stone, the granite slab whose engravings in Greek were used to decipher ancient Egyptian hieroglyphics. Jesuit manuscripts discovered in Naples, Italy, had seemed to achieve something similar for khipus, but are now thought to be forgeries.
In Rapaz, villagers still guard their khipus the way descendants of those in the West might someday protect shreds of the Bible or other documents if today’s civilizations were to crumble.
“They must remain here, because they belong to our people,” said Fidencio Alejo Falcón, 42. “We will never surrender them.”

Andrea Zárate contributed reporting from Lima, Peru.


San Crist�bal De Rapaz Journal – High in the Andes, Guardians of an Inca Mystery – NYTimes.com

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Tensions Over Chinese Mining Venture in Peru

NY Times

SAN JUAN DE MARCONA, Peru — In its worldwide quest for commodities, China has scoured South America for everything from Brazilian soybeans to Guyanese timber and Venezuelan oil. But long before it made any of those forays, China put down stakes in this desolate mining town in Peru’s southern desert.
The year was 1992. Chinese companies had begun to look abroad. One steelmaker, the Shougang Corporation of Beijing, set its sights on an iron ore mine here and bought it in a move that seemed particularly bold. At the time, Peru was still plagued by attacks by the Maoist guerrillas of the Shining Path.
But the hero’s welcome for Shougang soon faded. Workers at the mine, which was founded by Americans in the 1950s and nationalized by leftist generals in the 1970s, began fomenting the unexpected: a revolt that has endured to this day, marked by repeated strikes, clashes with the police and even arson attacks against their nominally Communist bosses from China.
“We quickly realized that we were being exploited to help build the new China, but without seeing any of the rewards for doing so,” said Honorato Quispe, 63, a longtime union official at the mine, where workers have held three strikes this year alone, including an 11-day stoppage last month.
The long-festering conflict with Shougang over wages, environmental pollution and Shougang’s treatment of residents of this company town does not square well with China’s celebratory vision of its rising profile in Latin America, in which everyone benefits and a “win-win” is “the consensus.” Latin America, as this idea of so-called South-South cooperation goes, sells China raw materials like copper, oil or iron; in return, the region buys goods like cellphones, cars and cheap plastic toys.
The tension in Marcona, one of the most conflict-ridden towns in a country increasingly prone to conflict over mining and energy projects, suggests that China’s engagement in the region — like that of the United States, Britain and other powers that preceded it in Latin America — is not without pitfalls.
While not the dominant theme in the region’s relations with China, a wariness is crystallizing in some countries over the booming trade with China.
Reactions to this surge largely focus on cheap Chinese imports or on China’s assertive efforts to win access to energy reserves. In both Brazil and Argentina, for instance, manufacturers accused Chinese companies of unfairly dumping Chinese products in their markets, prompting new tariffs against some Chinese imports.
But perhaps nowhere in the region has wariness and regret over Chinese investment coalesced as much as in Marcona. With about 15,000 residents, it still has the look of a mining town in the American Southwest, a legacy of its construction in the 1950s by engineers from the United States.
The Americans are long gone, but the Chinese managers now live in the same ranch-style houses built for their predecessors in a district called Playa Hermosa (Beautiful Beach). They drive sport utility vehicles and talk to subordinates through translators. They eat meals at their own cafeteria, avoiding mixing with Peruvians in town.
Workers here said the problems with Shougang began in the 1990s, when the company slashed the mine’s work force to 1,700 from 3,000 and brought in some Chinese workers. Resistance in the form of strikes soon convinced the managers to return their workers to China.
Resentment also emerged when Shougang did not invest a promised $150 million in the mine and the town’s infrastructure, opting instead to pay a $14 million fine for failing to do so, and left blocks of housing once occupied by workers vacant in a town with an acute housing shortage.
At a union building, workers spoke of low wages and company resistance to enacting government-mandated raises, and they claimed that Shougang had dumped chemical waste into the sea.
On the other side of Marcona from Playa Hermosa, some workers at the mine live in bleak company housing. Others rent squalid rooms in the town. A lower class of squatters subsists on Marcona’s edge in a driftwood shantytown, Ruta del Sol.
“The Chinese see us as little more than slaves,” said Hermilia Zamudio, 58, a resident of Ruta del Sol, whose husband was fired from the mine after working there for almost 30 years. “They deem it beneath them to talk to us, and when they need to address problems here, they do so with their thugs.”
Clashes with private security guards and with the police, who receive a monthly stipend paid by Shougang, are common in Ruta del Sol, on land where Shougang says it has concessionary rights to exploit deposits of dolomite, a mineral it hopes to extract for smelting iron and steel.
At one clash last year, Wilber Huamanñahui, 21, a construction worker, was shot dead as he and dozens of others tried to take possession of land controlled by Shougang. The case remains unsolved. “I know there will never be justice for his killing,” said his widow, Zoila Benites, 18.
Elected officials here still express dismay over the inability to punish those responsible for Mr. Huamanñahui’s killing. “We think there’s an effort by judicial authorities to delay the process for four or five years until the matter is forgotten,” Joel Rosales, the mayor of San Juan de Marcona, said this month.
Shougang, which keeps its Chinese managers cloistered away from the news media, has generally responded to such statements with silence. An effort to approach Chinese executives at their private cafeteria here was met by a threat of forceful expulsion by a guard.
Raúl Vera la Torre, a Peruvian executive for Shougang who handles relations with the government and journalists, acknowledged in an interview in Lima that the company faced complaints over issues like the housing shortage, water scarcity and expulsions of squatters. He contended this month that Shougang had carried out projects to improve the quality of life in the town, like providing potable water to many residents.
Still, he said, “a company cannot take on duties that are those of a government.”
For now, Shougang seems prepared to manage from crisis to crisis. The mine here has been the focus of one to four significant strikes annually in recent years, according to Evan Ellis, a specialist in Chinese-Latin American relations at the Center for Hemispheric Defense Studies in Washington.
Mr. Vera la Torre, Shougang’s Peruvian executive, said he preferred to focus on Marcona’s potential. Pointing to China’s long-term view, he said Shougang planned to invest $1 billion to raise production to 18 million tons of iron ore by 2012 from 8 million tons today.
Geography blessed Marcona, he said, with a location at the end of a planned highway link to Brazil. Others are also eyeing Marcona’s location, including an American fertilizer manufacturer that plans to build a $1 billion plant here. Large ships could easily dock in a nearby port, which Shougang also owns.
But Marcona’s workers suggest that unlocking that potential could do little to ease tension here.
“After nearly two decades of this experiment, the answer is no,” said Félix Díaz, 66, a senior union official. “When the Chinese arrived, they talked about things like solidarity and the equality of man. If this is the brotherhood they praise, then one day sooner or later, the Chinese must be made to leave.”

Andrea Zárate contributed reporting from Lima, Peru.

As China Expands in Latin America, Tensions Fester at Its Mining Venture in Peru – NYTimes.com

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