Peru’s Mining Strike Set to Continue

Not a nice thought for most, I'd venture. The reason is that due to the political process in Peru it's likely that the political debate needed on the main point of protest amongst the miners isn't debated until the 26th. At the moment, congress is in recess, and only the permanent parliamentary commission is sitting. And according to this report, the 'Union Por el Peru' [UPP] political party is against this law being debated by the permanent committee and insists it is debated by the full congress. As UPP holds a chunky 20 seats in a Congress of 120 (the biggest block is only 36 seats big... it's a pretty fractured congress), this opinion may well be enough to halt all progress.

In the words of UPP spokesperson Oswaldo Luizar:

We propose that this very important ruling that would create (social) convulsions in our regions be debated by the full Congress and not in the Permanent Commission. The congress members of UP are not going to act irresponsibly and compromise the social order in some regions.

So we have an impasse on our hands. If Congress doesn't convene until the 26th and the miners insist on striking until that date, there are nearly four weeks to go before any progress is made on this industrial action. Southern Copper (PCU), Compania de Minas Buenaventura (BVN) and the other major Peru-exposed miners are suddenly looking very shortable, no? On the other hand, non-Peruvian exposed miners may get to benefit from any spike in metals prices, such as these two companies I wrote up a couple of days ago.

Disclosure: long PCU

Comments

[blink0404]

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www.greenfaucet.com/sh...

[paultaut]

Commodities are stable to Up during the past week.

Commodity stocks are down substantially. Some say that this portends the end of the Cycle. I believe Capital is being raised by Institutions the only way they can raise it without creating further Red Flags across the financial markets.

You sell the assets with the highest appreciation first, then you unload the rest. Mark to Market can only be postponed for so long, the Piper has been playing, maybe now he will be paid.