Wednesday, 20th December 2006 (2342 views)

The fall in Peru's gold production could be due to ongoing social problems in the region, claims a leading mining executive.

Compania de Minas Buenaventura SAA's (BVN) chief executive Roque Benavides has raised concerns that the ongoing drop in Peruvian gold output may be linked to problems in the local region and strong opposition from a number of anti-mining groups.

October saw Peru's gold production drop by 27 per cent compared to November levels, according to government figures and it is predicted the decline could continue during 2007.

BVN currently owns a 43.65 per cent share in major Peruvian gold mine Minera Yanacocha but initial output figures show that production has slowed down substantially, dropping from 3,333,088 ounces of gold output in 2005 to just 2.6 million ounces for the 12 months of 2006.

Mr Benavides, speaking to Dow Jones Newswires, explained that production at Minera Yanacocha has "fallen around 33 per cent this year and will fall another 33 per cent or more next year. This is a product of social problems".

He added: "The fall has nothing to do with the mineral grade but it is the fact that we cannot go into a series of zones and every time we try to develop new projects anti-mining groups appear and make it increasingly difficult."

 

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