Metals miner Hochschild rebounds as Peru U-turns over “illegal” shutdowns

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Shares of Inning Group Hochschild jumped more than 25% today after Peru’s government reversed a decision to close two of its biggest silver mines.

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The U-turn was welcomed by FTSE 250-listed group CEO Ignacio Bustamante, who branded a move to accelerate the “illegal” closure of its Inmaculada and Pallancata operations in the Andean region of Ayacucho.

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The announcement by Peru’s newly-installed Prime Minister Mirtha Vasquez wiped nearly £500 million off Hochshield’s market value within minutes of the start of business in London on Monday.

Today, after what the firm called “discussions between senior cabinet members and representatives of the mining industry”, she backtracked, saying there would be no “unilateral shutdown”.

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Shares were back up to 150p and down to 70p. He was given another bump as Bank of America recommended a ‘buy’ setting a target price of 160p.

Rural union activist Pedro Castillo was installed as president in the spring and has driven panic through Peru’s mining sector with a pledge to nationalize the industry and raise taxes to fight poverty.

Bustamante said: “We are delighted that our Inmaculada and Pallancata mines can continue to operate without any uncertainty and furthermore, we reaffirm our goal of increasing our resources and extending our mine life in accordance with current legislation. Huh.

“We would like to thank our communities, our employees, and the institutions and businesses that spoke out in support of legal certainty, employment and private investment in the country.

“At Hochschild we have a longstanding commitment to acting responsibly, working closely with local communities and with respect for the environment. We will build on this approach as we continue to contribute to the development of southern Ayacucho and Peru. Will keep.”

Hochschild Mining has its roots in the group founded by Mauricio Hochschild in 1911 and has operated in Peru since 1925, employing about 5,000 people directly and 40,000 indirectly in the country.

The company listed in London in 2006 and is headed by Eduardo Hochschild, who owns 38 percent of the shares.


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