MercoPress. South Atlantic News Agency

Gold symposium in Peru

The shimmering gold that was the symbol Inca kings power and glory, and brought razing Spanish conquistadores still abounds in Peru and continues to attract investors.

The strength of that attraction is evident in the 7th International Gold Symposium held in Lima. Peru is the world's fifth-leading producer of gold, a rank it wrested last year from Russia. Furthermore, gold reached this week a new quarter century record, 679 US dollars an ounce, a 23% increase since last January given ongoing tensions in Middle East and international volatility.

Under the banner, "Gold Opportunities in Peru and Latin America," the former director of the World Trade Organization, New Zealand's Mike Moore has also joined top international mining executives and other industry figures for three days of discussions.

Peru extracted 206 tons of gold last year, up 20% over 2004, according to figures from the Gold Committee of the National Society of Mining, Oil and Energy.

Peru earned 3 billion US dollars from gold exports in 2005 showing the continued vitality of a trade that dates back to the 16th century, when the Spanish conquerors of Mexico and Central America heard that there was abundant gold for the taking in a land then known as Viru or Piru.

Conquistador Francisco Pizarro led the expedition, quickly capturing the Inca emperor Atahualpa, for whose safe return the invaders demanded a quantity of gold, silver and precious stones that came to fill three large rooms of the palace where he was held prisoner.

Despite the Inca's payment of the vast ransom, Pizarro had the Inca leader executed by strangulation in 1533. The episode unfolded in Cajamarca, still the site of an important working mine and the place where the oldest carved piece of gold in the Americas was discovered 16 years ago.

Also located in northern Peru is Latin America's largest deposit of gold: the Yanacocha mine, which is mostly owned by U.S.-based Newmont Mining. The Peruvian firm Buenaventura holds 43.6% of the operation, with another 5% percent in the hands of the World Bank's International Finance Corporation.

Peruvian gold is not only plentiful, but of high quality, as pointed out by the Inca Garcilaso de la Vega (1539-1616), the son of an Indian princess and a Spanish conquistador whose writings were long the only source on the history of pre-Columbian Peru.

The chronicler said that most of Peru's gold was of between 18 and 20 karats in purity, and that the mines of Callauaya, in the southeast, yielded 24-karat nuggets.

Yet foreign firms remain nervous about investing in Peru, mainly because the country still lacks a stable, predictable legal system and is unable to guarantee security in some of the remote rural areas where gold deposits are found.

At the same time Indian rights activists pressure mining companies to show more social responsibility when operating near indigenous communities, while labour unions demand more workers' safety.

Another player in the industry, environmentalists point to the danger that water and soil will be contaminated by toxic substances used in gold mining and processing such as mercury and cyanide.

All Peru's "official" gold mines output is exported. The country's tiny, low-tech domestic jewellery industry works with the precious metal from unregistered mines and gold-panning sites, many of them located in jungle regions.

Some 30,000 families are employed in such wildcat mining operations, authorities say, underlining that child labour and other forms of exploitation practices are common in the informal "gold industry" sector.