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Peru: Morning News Headlines – July 24

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Peru’s Central Government Criticized by Regional Governments

(LIP-ir) — In a statement made yesterday, Peru’s Prime Minister Jorge del Castillo announced that Government authorities did not have the right to strike, stating "it is the state against the state," The Premier’s statements were directed towards Ayacucho’s Regional President, Ernesto Molina and the 22 mayors who have organized the "Waris March", a march from Ayaucucho to Lima which has now grown to 5,000 people. What has caused further controversy is the fact that Peru’s central government has stated that government officials that participate can be incapacitated for a period of 6 months to 6 years. This has generated responses from several Regional Governments, such as Puno, Cusco, Loreto, Lambayuque and Arequipa who have stated that the law is unconstitutional and rights are being limited.

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PM Criticizes Peru’s Regional President for Organizing Strike (by LIP, Jul 23, 2007)
5,000 Peacefully Protest in Lima, Peru after March from Ayacucho (by LIP, Jul 23, 2007)
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S&P Revises Peru LT Outlook

Peru’s strengthening credit profile has prompted ratings agency Standard & Poor’s to improve its BB+ long-term foreign and BBB- long-term local currency sovereign credit ratings on the Republic to positive from stable. At the same time, S&P affirmed its B short-term foreign and A-3 short-term local currency sovereign credit ratings on Peru. “Strong economic growth prospects from rising investment” and “adept debt management” were cited as two main factors, behind the ratings action. The first factor will help to make Peru “less vulnerable to both terms-of-trade shocks and political instability”, while the second is “reducing the vulnerability of the government’s debt trajectory to adverse foreign exchange movements”, according to S&P’s Buenos Aires-based credit analyst Sebastian Briozzo. Commenting on the action, Goldman Sachs analyst, said the firm believed the outlook change was deserved and that “Peru is in a good position to obtain the investment grade rating over the next 12 to 18 months (late 2008 or 2009). Fitch also rates Peru at BB+ with a stable outlook, just one rating action away from investment grade, while Moody’s is one notch below at Ba2 with a stable outlook. (Latin Finance)

BCP plans US$70mn capital hike, US$160mn debt issue – Peru

Shareholders of Peru’s largest bank Banco de Crédito del Perú (BCP) have approved a capital increase for the equivalent of US$70mn by retaining profits, the bank told securities regulator Conasev in a filing. In addition, shareholders gave the thumbs-up to a subordinated debt issue for up to US$160m, according to the filing. The main objective of both decisions is to strengthen the bank’s capital base to support business growth and progressively adjust it to Basel II norms, according to the filing. BCP is the flagship subsidiary of Peru’s largest financial services holding company Credicorp (NYSE: BAP). (Business News Americas)

Milpo inaugurates US$110mn Cerro Lindo mine – Peru

Peru’s Minera Milpo has inaugurated its US$110mn Cerro Lindo lead-zinc-copper mine in the Chinca province of Ica department, the company said in a statement. Once at full production, Cerro Lindo will churn out 146,000t/y of zinc concentrate, 39,500t/y copper concentrate and 14,800t/y of lead concentrate, according to the statement. The total investment in Cerro Lindo included the construction of the mine, concentrator plant and related facilities, in addition to an electrical substation and desalination plant some 60km away, Milpo director of communication and image Juan Alberto Flores told BNamericas. Cerro Lindo is Peru’s first mine to use solely desalinized seawater, Flores said. The mine also uses a pulp tailings deposit, in which tailings are partially dehydrated and deposited in a paste form that consumes roughly 60% less space than the conventional liquid tailings method and therefore is more environmentally conscious, Flores explained. The mine employs 300 people and had roughly 3,000 on its payroll during its 15-month construction phase. (By Pablo Gaete Business News Americas)

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Compania Minera Milpo Inaugurates Cerro Lindo Mine in Peru (by LIP, Jul 20, 2007)
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