Peru's Deadly Gold Mine Attack Highlights Growing Risks

• A dramatic and deadly attack on a gold mine in Peru last Saturday has thrown a spotlight on illegal miners and criminal gangs targeting mines, which in recent years has left scores dead and cost billions of dollars in losses, according to industry and government officials.
• Nine workers were killed and ten others gravely injured in the latest attack, where men armed with explosives raided and took hostages at a mine belonging to Poderosa, one of Peru's top gold producers. The government blamed illegal miners and criminal groups.
• The attack has highlighted a growing risk for miners in the Andean nation, the world's no. 2 copper producer and an important source of gold and silver. "Security is now one of the main costs," Poderosa corporate affairs manager Pablo de la Flor told Reuters after the attack. "Illegal miners and criminal groups represent a terrible alliance for the sector."
• The impact is showing up on balance sheets, a headache for firms and Peru's government as it battles to dig out of a recession, with mining the country's main economic engine.
• A recent study by the local industry chamber the National Society of Mining, Petroleum and Energy of Peru, said illegal gold mining is responsible for about $6Bn in annual losses, some 2.5% of domestic GDP.
• Illegal mining in Peru moves more money than drug trafficking, between $3Bn and $4Bn per year, according to government data. De la Flor says illegal mining has grown thanks to a program designed to formalize artisanal miners, called REINFO (Registro Integral de Formalización Minera), which provides temporary licenses to small mines.
• Peru's Ministry of Energy and Mining did not immediately respond to a request for comment on the issue. On Sunday night, the ministry released a statement saying it would look at REINFO to identify those taking advantage of the program.

(Source: Reuters)