Peru's New EIS Evaluation Agency to Benefit Mining Investments

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Researched by Industrial Info Research Latin America (Cordoba, Argentina)--In December, Peruvian President Ollanta Humala signed a law creating the Servicio Nacional de Certificacion Ambiental para las Inversiones Sostenibles (SENACE), an agency that will evaluate and control the environmental impact studies (EIS) for Peru's mining projects. This evaluation agency is part of the Peruvian government's commitment to develop the mining industry, one of the most important, productive forces in the country, representing the 60% of Peru's export revenue.

The implementation of the SENACE will take between 12 and 18 months, but its creation is an important step in the search for a balance between environmental preservation and mining investments. Many important projects have faced difficulties while waiting for EIS approval, including social opposition related to environmental impacts, especially when they concern water resources.

About 20 mining projects worth more than $7 billon are awaiting environmental approval, many of them delayed due to conflicts with local communities. The major aim of SENACE will be to increase social confidence in EIS studies and reduce conflicts. The participation of the private sector, local communities and the national government in the agency's board of directors will help to develop mining projects that are profitable and environmentally sustainable in the long run.

One of the most important projects awaiting EIS approval is Freeport-McMoRan Copper & Gold Incorporated's (NYSE:FCX) Cerro Verde's expansion. This copper and molybdenum mine and concentrator plant expansion project, worth $4.4 billion, expects to produce approximately 1.1 billion pounds of copper and 25 million pounds of molybdenum per year by 2016.

The Inmaculada Silver and Gold Mine grassroot project is also awaiting final permits to move forward. Hochschild Mining plc (LSE:HOC) plans total capital expenditures of $370 million for this project and expects to start operations by the end of 2014.

Peru is a pro-mining country with the most important number of projects under development in South America. Is the world's No. 1 silver producer and is the second-largest producer of copper.

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