Buenaventura boss bets Peru will stay friendly to mining

Orcopampa operation. Photo by Buenaventura.

Buenaventura, Peru’s biggest publicly traded precious-metals producer, is plowing ahead with investments, betting that radical proposals from a “terrible” government won’t prosper, Chairman Roque Benavides said.

Peruvian President Pedro Castillo lacks support to push through a constitutional rewrite, while free trade agreements protect mines from nationalization proposals, Benavides, 67, said in a Friday interview from his Lima office.

Peru, the world’s No. 2 copper and zinc supplier and a major producer of silver and gold, has been rocked by a string of community protests and unrest over living costs, exacerbating tensions facing the president, a former rural activist from a Marxist party. While Benavides accuses Castillo of fanning confrontations, he said Peru can emerge from its political turmoil — marked by four cabinet overhauls in nine months — via party and campaign reforms.

“I haven’t seen a government as unstable as this government in my life,” he said. Still, when asked if Peru is a sound investment right now given all the unrest, he said: “For Roque Benavides, yes.”

The country, with rich deposits and the necessary human capital, remains attractive despite its slide down a competitiveness ranking, said Benavides, whose father founded the company now known formally as Cia. de Minas Buenaventura SAA. It’s going ahead with projects, including a more than $100 million spend this year at San Gabriel.

“We have to straighten out all these differences that we may have, but Peru is still a country that offers a lot of opportunities,” he said. “I’m here and I will stay here.”

A proposal to draft a new constitution has about a 20% chance of happening, Benavides said. Asked about the idea of raising mining taxes to fund measures for softening the blow of inflation, he said: “The government is unable to spend all the money that it collects already, so why increase taxes?”

Buenaventura’s assets are all in Peru. The company has previously looked to diversify geographically, but found better opportunities in its home country. Still, it is open to opportunities in Chile, Ecuador, Colombia and Argentina, Benavides said, adding that he “loves” the Argentine province of San Juan.

With many in the gold industry predicting an increase in dealmaking as companies look to buy growth after years of underinvestment and now rising costs, Buenaventura remains focused on its own pipeline of projects.

“Shopping around the world and buying a new company is not our style,” he said. “But we don’t discard that as well.”

As a potential target, Buenaventura would be “complex” given many would-be buyers are looking for single-asset companies, he said. Still, “it’s not out of the question, and if that benefits shareholders, well we’re in the market.”

The company’s stock rose as much as 3.7% in New York on Friday, extending a year-to-date gain to 26%.

While many of his Peruvian mining colleagues prefer to stay out of politics, Benavides sees being outspoken as his duty — though that doesn’t mean he has political ambitions.

“I have worked for over 40 years in Buenaventura,” he said. “If things don’t change dramatically, I hope I will continue.”

(By James Attwood)

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