Living in Peru : your everyday companion

(by Jacqueline Saettone, Partner of Aleteia Capital and Professor of Universidad del Pacifico)


A few years ago, it would have seemed odd to speak about intangible assets in mining - not because the mining industry lacked them - but because in general, companies were not used to thinking about them.

Although mining has traditionally used and created tangible assets, it has also – consciously or unconsciously - used and generated intangible assets in its business: intangibles such as their knowledge of geology, metallurgy or construction. Their capacity to establish joint ventures or to win licensing processes; or the financial and operational models they create. Today, some mining companies are also beginning to view their reputation as an intangible asset that needs to be managed.

LIMA, Peru, Oct. 30 -- Compania de Minas Buenaventura S.A.A. ("Buenaventura" or "the Company"), Peru's largest publicly traded precious metals mining company, announced today its results for the third quarter of 2006. All figures have been prepared in Peruvian GAAP and are stated in current Peruvian Nuevos Soles (S/.) as of September 30, 2006. For the convenience of the reader, figures are stated in U.S. dollars (US$) at a rate of S/.3.25 per US$1.00 for 3Q06 and S/.3.345 per US$1.00 for 3Q05.

Comments from the Chief Executive Officer:

Mr. Roque Benavides, Chief Executive Officer of Buenaventura stated: "We are pleased to continue delivering positive results to our shareholders."

(by Enrique Ghersi, first published at the "Independent Institute" - link -)

In recent weeks, Peru has seen violent protests on the part of local communities against foreign investors involved in mining. Some people advocate raising taxes on the mining companies, while others have promoted voluntary cash donations on the part of foreign investors to placate the protestors. But the social crisis that affects mining in Peru will not be resolved with taxes or alms, because it is the consequence not of the lack of state intervention but of its excess.

The crux of that crisis is the fact that the peasants who own the surface of the land do not own the subsoil, which holds the vast mineral riches of our country.

Because of legal artifice arising from a false interpretation of Spanish law prevalent in Peru, the owner of the subsoil is the State, which confers it, in concession, to the mining companies interested in exploiting it.