President Garcia opens new section of Southern Inter-Oceanic Corridor

Peruvian President Alan Garcia will visit Friday the southeastern Madre de Dios Region to open the Inambari-Iñapari stretch 3, El Triunfo-Planchon section of the Southern Inter-Oceanic Corridor between Peru and Brazil.

With an investment of US$ 32 million, the 34 km-long newly-paved section goes from El Triunfo town (located at the 486 km mark) to Planchon town (at the 520 km mark).

The opening of this section marks the completion of the highway linking Peru’s Puerto Maldonado with Iñapari in the frontier with Brazil.

In total 337 km of roads and 12 bridges have been completed so far, which represents 82 percent progress' of the project.

The Head of State is traveling accompanied by Transport and Communications Minister Enrique Cornejo, and Odebrecht official Jorge Barata.

Peru, Chile entrepreneurs team up to invest in Asian markets

The Chile-Peru Business Committee aims to boost trade relations between the two countries by encouraging entrepreneurs to make joint investments in the Asian market.

Chilean trade official Hernan Somerville explained that there are great business opportunities for Peru and Chile, noting that "it does not matter which country invests first because Asia is a huge market."

Somerville said that the Asian market is a challenge we have to face, and this will happen as Chilean and Peruvian entrepreneurs continue to invest in each other's countries.

"It is not just about profitability but also about sharing information," he told El Financiero daily.

For his part, trade official Juan Carlos Raffo welcomed the idea saying that the Committee "will sponsor joint trade missions to Asia so that entrepreneurs can meet and explore business opportunities, especially in the export-oriented agricultural sector

Some 150,000 tourists to enjoy Inti Raymi in Cusco

Some 150,000 local and foreign tourists will attend the Inti Raymi ceremony to be held on June 24 in Cusco, the general manager of Cusco’s Festivities Municipal Enterprise (Emufec) Miguel Zamora said Tuesday.

This is the number of people that have paid for a sit to enjoy this festivity, though some other people rather climb a little mountain near the esplanade of Sacsahuayman to appreciate the staging.

Zamora said that reservations for a sit to watch the Inti Raymi have reached 78 percent, and most of them belong to foreign tourists.

The Inti Raymi (Festival of the Sun) is considered as the most solemn and grandiose festivity of the Inca era in honor of the god Inti (Sun).

It used to mark the winter solstice and a new year in the Andes of the Southern Hemisphere.

Since 1944, a theatrical representation of the Inti Raymi has been taking place at Sacsayhuamán (two km. from Cusco) on June 24 of each year, attracting thousands of tourists and local visitors.

Peru LNG produced first cargo of natural gas

Peru LNG, the first LNG liquefaction plant in South America, has produced its first cargo of liquefied natural gas (LNG), bringing this project in on time and under budget with a safety record that is ten times better than the industry norm, CB&I announced Tuesday.

CB&I is the engineering, procurement and construction contractor for the full scope of the project, the first LNG liquefaction plant in South America.

Hunt Oil Company is the owner and operator of Peru LNG, partnering with SK Energy of South Korea, Spain's Repsol YPF and Marubeni of Japan. The project is located in the remote Pampa Melchorita area about 170 kilometers south of Lima.

Ray L. Hunt, Chairman and CEO of Hunt Oil Company, said CB&I has been an outstanding partner on the Peru LNG project.

"We applaud them for their great success in bringing this project in on time and under budget with a safety record that is ten times better than the industry norm," he stated.

The plant, with capacity of approximately 4.5 million tons per year, cools the natural gas to -160degC (-260degF), reducing the volume by approximately 600 times to facilitate storage and transportation.

The liquefaction plant utilizes a propane pre-cooled mixed component refrigerant process, four refrigeration compressors, two gas turbines and associated systems.

In addition, CB&I constructed a gas treatment plant, power generation utilities, two 130,000 cubic meter LNG storage tanks, the topsides of the 1,300 meter trestle and the ship loading facilities.

CB&I directly employed more than 5,600 workers at peak construction on the project, which indirectly supported another 25,000 local jobs.

About 90% of CB&I's workforce was comprised of Peruvian employees who spent nearly one million hours in training to learn the necessary skills and safety procedures required for a project of this magnitude.

Employees achieved an outstanding safety record, working more than 27 million hours on the jobsite with a lost-time incident rate of 0.01.

"It has been a privilege to be part of this major project, which has helped generate strong economic development in Peru," said Philip K. Asherman, President and CEO.

"I would like to thank and congratulate our project workforce for an outstanding safety performance and exceptional productivity and work quality. Peru LNG's great success further enhances CB&I's EPC track record across the full LNG value chain, from gas processing to liquefaction on through regasification," he added. (Andina)

Brazil’s Petrobras Will Invest $224 Billion 2010-2014

Petroleo Brasileiro SA, the Brazilian state-controlled oil company, plans to invest $224 billion through 2014 as it seeks to develop the Americas’ largest discovery in three decades and more than double output.

About 95 percent of the total amount will be invested in Brazil, the Rio de Janeiro-based company said today in a regulatory filing.

Petrobras, which expects to raise $58 billion through debt and equity sales over the five-year period, said it will spend about $118 billion on oil exploration and production.

Petrobras is seeking to fund the development of offshore reserves in the so-called pre-salt region off Brazil’s coast, home to discoveries including Tupi, the largest find since Mexico’s Cantarell in 1976. Chief Executive Officer Jose Sergio Gabrielli plans to more than double output to 5.38 million barrels a day by 2020, compared with 2.7 million barrels now.

The company said it expects oil to average about $80 a barrel through the five-year period and that refining capacity will rise to 3.2 million barrels per day by 2020, from about 1.8 million barrels a day at present.

Bloomberg - Dale Crofts

Colombia’s Santos Hails Uribe in Landslide Presidential Victory

Colombia’s Juan Manuel Santos, after being elected president by a landslide last night, pledged to free his country from the “nightmare of violence” by sustaining all the government’s might against Marxist rebels.

The record 9 million ballots cast for Santos gave the U.S.- educated economist and former defense minister 69 percent of the vote against 28 percent for the Green Party’s Antanas Mockus.

Santos dedicated the victory to President Alvaro Uribe, who leaves office Aug. 7 having spurred record economic growth and investment while beating back insurgents and slashing by half the number of murders during eight years in office.

“Colombians voted massively today for a government that continues and advances your administration,” Santos told supporters in Bogota last night. “If we have come far it’s because we are standing on the shoulders of giants,” he said, quoting 17th-century English scientist Isaac Newton.

Santos’ victory will extend gains this week by the peso, the world’s top-performing currency, and the benchmark IGBC stock index, said Julian Cardenas, chief economist at Bogota- based brokerage Corredores Asociados SA.

The peso, whose 7 percent gain against the dollar this year is the biggest among 176 currencies tracked by Bloomberg, rose for a fourth straight week before yesterday’s vote as Santos coasted to victory. The IGBC has gained 7.7 percent, beating a 4.8 percent decline in the MSCI EM Latin America Index.

“Santos won’t change the rules of the game,” Cardenas said, adding that Santos’ pledge not to increase taxes and deepen Uribe’s security policies will draw investment to the country’s new oil wells and mines. “This win is a positive signal for investors who have their sights on Colombia.”

Regional Wrangling

Santos, 58, delivered some of the biggest blows against the Revolutionary Armed Forces of Colombia, or FARC, while serving as defense minister from 2006 to 2009. These include the rescue of 15 hostages including politician Ingrid Betancourt and three U.S. defense contractors. He also ordered the raid into Ecuador that killed the group’s second-in-command, Raul Reyes.

His most pressing challenge is improving relations with Colombia’s neighbors, said Felipe Botero, a political science professor at Bogota’s Universidad de los Andes.

Venezuelan President Hugo Chavez ordered troops to the border in retaliation for the airstrike and cut off trade ties with Colombia after Uribe inked a deal last year to increase U.S. access to seven military bases. Exports to Venezuela, traditionally Colombia’s biggest export market after the U.S., plunged 69 percent in April from the same month a year ago.

‘Two Piranhas’

Santos has accused Chavez of allowing the FARC to stage attacks from across the border, while the Venezuelan socialist has attacked the president-elect as a “warmonger.” An Ecuadorean prosecutor in April ordered Santos’ arrest.

“Chavez and Santos are like two piranhas in a tank together,” said Larry Birns, head of the Council on Hemispheric Affairs, a Washington research group. “There will be every opportunity for provocation and brinkmanship.”

Santos, who during the campaign vowed to invite Chavez to his inauguration, said last night that “all the countries in the world, and above all those in the region, can be sure that in my government they will find an ally.”

Rebel Attack

Underscoring the rebels’ resilient strength in many rural areas, seven police officers were killed after stepping into a minefield laid near the border with Venezuela. Separately, three soldiers were killed in a firefight with the FARC in Meta province.

Yesterday’s 44 percent turnout was the lowest since 1994, as voters expecting Santos to rout Mockus stayed home to watch the World Cup soccer tournament.

Santos, who won 47 percent in the first round against 21 percent for Mockus, has capitalized on the support of Uribe.

In 2002, the year Uribe took office, Colombians suffered 28,837 murders and 2,882 kidnappings. By 2009, those numbers had been cut to 15,817 and 213 respectively. Uribe, a lawyer and rancher, leaves office with a 63 percent approval rating.

Mockus, 58, leveraged his record as two-time mayor of Bogota and a pledge to sweep away corruption to overtake Santos in polls taken before the first round. However, the so-called Green Wave faded after the former philosophy professor expressed “admiration” for Chavez and said he would consider extraditing Uribe to Ecuador.

“Starting today, the Green Party consolidates itself as a political force,” Mockus, brandishing a pencil that was a symbol of his campaign’s focus on education, told supporters yesterday in Bogota.

Attacking Unemployment

Santos, a former finance minister and scion of the family that founded the nation’s largest newspaper, Bogota’s El Tiempo, focused his campaign on reducing a 12.4 percent unemployment rate that is the highest in South America.

Colombia’s economy is recovering slower than its neighbors from the global financial crisis, in part due to the trade row with Chavez. The International Monetary Fund forecast in May that South America’s fifth-largest economy will grow 2.2 percent this year, the lowest in the region after Venezuela, which is in recession.

The economy likely grew 3.4 percent in the first quarter, according to the median estimate of 14 analysts surveyed by Bloomberg ahead of the first quarter GDP report on June 24.

Santos, a Harvard University-educated economist, promised to close by 2014 a budget gap equal to 3.6 percent of gross domestic product and achieve annual growth of 6 percent within two years.

‘No Excuses’

He’ll be assisted in the effort by a congressional majority exceeding the one enjoyed by his former boss. Parties supporting his candidacy won 68 of 102 Senate seats in March congressional elections, compared with 5 for the Green Party. The Liberal Party, which had been the biggest opposition bloc to Uribe’s government, is split on whether to support Santos.

There’s “no excuses if Santos really wants to tackle” fiscal reform and cut into the deficit, Pedro Tuesta, senior economist for Latin America at New York-based 4Cast Inc., wrote in a note to clients.

His victory will also help woo international investors, Tuesta said. The government expects foreign direct investment to rise to $10 billion this year, the bulk in mining and energy projects, from $7.2 billion in 2009.

Bloomberg - Helen Murphy and Matthew Bristow

To contact the reporter on this story: Helen Murphy in Bogota at hmurphy1@bloomberg.net; Matthew Bristow in Bogota at mbristow5@bloomberg.net

CAN, Finland sign agreement on regional biodiversity program

The Andean Community (CAN) and the Government of Finland sign an agreement concerning the implementation of the Regional Biodiversity Program in the Amazon region of the CAN member countries, known as BIOCAN.

The agreement was signed by CAN Secretary General Freddy Ehlers Zurita and Finnish Ambassador in Peru, Kimmo Pulkkinen, during a special ceremony with the participation of the Ambassadors of Bolivia and Colombia in Peru, the acting Chargé d’Affaires of Ecuador and high-level officials of Peru’s environmental organizations.

The Secretary General and the Ambassador of Finland were in agreement in pointing out that the basic objective of the program is to raise the living standards of the people inhabiting the tropical Andean regions of the CAN member countries through the equitable conservation and sustainable use of their biodiversity, while respecting their cultural diversity.

According to a press release, they also coincided in stressing the incorporation of environmental issues in the negotiation of an Association Agreement between the CAN and the European Union and that poverty and the environment will be key topics of the Latin America and the Caribbean – EU Meeting next year.

Freddy Ehlers gave special emphasis to the importance of Finland’s cooperation in carrying out the environmental tasks the Andean Community has set itself, which include aspects relating not only to climate change, but also to biodiversity and water.

He pointed out the need for developed countries to understand that not only do we have to take care of, protect and develop our Amazon region in a sustainable manner, but that they have an enormous responsibility to the rest of mankind with regard to global warming."

The Finnish Ambassador, for his part, stated that the Agreement will make it possible to promote and help maintain sustainable biodiversity use in Andean countries with Amazon regions.

He pointed out that the successful experience of Finland’s Cooperation with Peru, known as BIODAMAZ, will be put to use in this regional biodiversity program in the Amazon region, which seeks to give international importance to the Andean countries’ Amazon region. He recalled that a Memorandum of Understanding was signed in January of this year by the CAN General Secretariat and the Government of Finland, marking the start of a joint effort. (Andina)

Peru Aims to Double State Companies on Exchange

Peru plans to double the number of state companies listed on the Lima Stock Exchange to 16 this year to raise financing for investment projects, said Jorge Villasante, director of state company financing agency Fonafe.

Peru’s government may “eventually” list all 33 state companies, including state mining company Activos Mineros SAC, and make a decision “within months” to trade up to a 20 percent stake in the eight companies already listed, Villasante said today in an interview at the exchange.

“State companies face delays with their investment projects,” Villasante said. “Capital markets have several options for raising capital, including bond sales.”

State companies including state-owned oil company Petroleos del Peru SA, known as Petroperu, are seeking cash to help fund 1.9 billion soles ($671.7 million) in investment projects this year, Villasante said. Fonafe applied today to list shares in state electricity companies Electro Sur SA, Egesur SA and Elor SA.

Peru may sell as much as 20 percent of Petroperu in a share offering before the government’s term expires next year, Finance Minister Mercedes Araoz said June 9 at the Bloomberg Peru Economic Summit.

Bloomberg - Alex Emery
To contact the reporter responsible for this story: Alex Emery in Lima at aemery1@bloomberg.net.

Peru, Brazil signed 12 agreements on mutual cooperation and integration

The Governments of Peru and Brazil today signed 12 bilateral integration and cooperation agreements in energy, health, financial and educational areas during the meeting between Presidents Alan Garcia and Luiz Inacio Lula Da Silva.

The signing ceremony was held at Hotel Tropical in the Brazilian city of Manaus, where ministers and business leaders from both countries also met on Wednesday.

Six of the documents are complementary to previously-signed agreements between the Peruvian International Cooperation Agency (APCI) and its counterpart in Brazil, the Brazilian Cooperation Agency.

The agreements were signed by Peruvian Foreign Minister Jose Antonio Garcia Belaunde and Brazil's Secretary-General of the Ministry of External Relations, Ambassador Antonio Patriota.

Also, the ministers from both countries signed two border integration agreements in river transport and in border health as well as a sanitary and phytosanitary agreement and an energy integration agreement.

Finally, Peruvian National Bank and the Caixa Economica Federal as well as the Universidad de Piura and the Universidad de Manaus signed a series of agreements.

Both leaders witnessed the signing of these documents and at the end of the ceremony, they signed a 32-point Joint Declaration, in which they reaffirmed their commitment towards further strengthening bilateral relations and mutual collaboration in various areas. (Andina)

Peru, Brazil to sign energy integration agreement

The Governments of Peru and Brazil will sign Wednesday an energy integration agreement, "which does not include the construction of any hydroelectric power station but will provide additional power to the Peruvian market at a fair price," announced Peru's Energy and Mines Ministry (MEM).

Energy and Mines Minister Pedro Sanchez will sign the agreement during today's presidential meeting between Peru's Alan Garcia and Brazil's Luis Inacio Lula da Silva.

According to Deputy Energy Minister Daniel Cámac, the agreement states that upon termination of the operation term (30 years) all future hydroelectric power plants will be transferred from the concessionaire to the state.

Camac pointed out that the agreement promotes the development of hydropower projects in Peru so as to meet the domestic demand for energy and export the remainder to Brazil.

“These investments will be made by the private sector and not by the States,” said Cámac.

Daily Telegraph reporter: There’s nothing quite like Peru’s Machu Picchu

Visiting Peru’s Machu Picchu is a unique experience that cannot be gained anywhere else in the world, it has been claimed.

Gap year travellers may want to head to the site as Daily Telegraph reporter Stanley Johnson has described it as still being as enticing as it was in the middle of the last century.

According to i-to-i.com, the reporter returned to the destination for the first time since his initial trip in 1959.

Of his recent journey, Mr Johnson remarked: "I found myself reliving the grandeur, mystery and excitement of the place I had known in my younger days."

"In the whole world, there is nothing quite like Machu Picchu," he added.

The writer observed not even the influx of 5,000 tourists a day could spoil the appeal of the area.

According to Suite101.com contributor Natalie Lefevre, there are a number of drinks that every visitor to Peru should sample, including the Pisco Sour and Inca Kola. (Andina)

Morgan Stanley Raises Growth Outlook for ‘Booming’ Brazil GDP

Morgan Stanley raised its growth outlook for Brazil’s economy this year after the government reported stronger than expected first quarter growth.

Morgan Stanley expects Latin America’s biggest economy to expand 7.9 percent this year compared with a previous forecast of 6.8 percent, Marcelo Carvalho, Morgan Stanley’s chief economist in Sao Paulo, wrote in an emailed report today.

“The math changes, although our view ahead does not: Brazil’s economy is booming,” Carvalho wrote.

Brazil’s economy is growing at a Chinese-like pace, with the labor market tight and little spare capacity, according to the report.

Bloomberg - Andre Soliani

To contact the reporter on this story: Andre Soliani in Brasilia at asoliani@bloomberg.net

Peru LNG Plant to Spur Gas Exploration, Investment

Hunt Oil Co.’s $3.8 billion Peru LNG plant may spur natural-gas exploration and attract investment to the Andean country, company Chairman Ray L. Hunt said today.

Peru is one of 18 countries worldwide to build a liquefied natural gas facility and has the largest such plant in South America, Hunt said. He spoke in Pampa Melchorita, Peru, during the opening ceremony for the plant, which has a capacity of 620 million cubic feet a day.

Peru has lined up another $10 billion in energy projects through 2016, including 68 exploration contracts, that are expected to double the country’s oil and gas output, according to the Energy Ministry. Exploration by companies including Repsol YPF SA and Petroleo Brasileiro SA may double gas reserves to 30 trillion cubic feet, Peru’s President Alan Garcia said.

“This project will provide the market incentives needed to carry out new exploration activity in Peru to find additional natural gas,” Hunt said.

The plant, a joint venture with Repsol, Marubeni Corp. and SK Energy Co., will make its first LNG shipment this month, Hunt corporate affairs director David Lemor said today in an interview.

Liquefied natural gas, or LNG, is gas that’s chilled to liquid form for transportation by tanker to distant locations. On arrival, it’s returned to a gas in a gasification plant for delivery to users.

Bloomberg - Alex Emery

To contact the reporter on this story: Alex Emery in Pampa Melchorita at aemery1@bloomberg.net

Peru CDS Trades A-Rated on Region’s Fastest Growth

Peru, the Latin American economy on pace to grow the fastest in 2010, is poised for as many as two credit-rating upgrades after the government cut debt, extended maturities and lured investment, credit-default swaps show.

The cost of protecting Peruvian bonds against non-payment for five years tumbled 46 basis points, or 0.46 percentage point, to 146 in the past year, according to data compiled by CMA DataVision. Swaps for Bahrain, whose debt is rated A by Standard & Poor’s, four levels higher than Peru’s BBB-, cost 173 while contracts for South Africa, ranked three levels higher, trade at 196.

Investors are betting Peru will win rating increases after the International Monetary Fund estimated the commodities-driven economy will expand 6.3 percent this year amid rising foreign- direct investment in mining and energy and record gold prices. President Alan Garcia, who defaulted on debt when he presided over the government in the 1980s, sold local bonds maturing in 2042 this year and issued dollar notes due in 2033 in exchange for securities maturing as soon as 2012.

“Any way you break down the credit profile for Peru, it’s very solid and almost a given that Peru’s going to move up in the credit ratings,” said Alberto Boquin, a Latin America debt and currency strategist at Bank of America Corp., said in a telephone interview from New York. Peru’s rating may rise by two levels in the next 18 to 24 months, Boquin said.

Fitch Ratings lifted its outlook on Peru’s rating to positive on June 2, citing its “solid” economic recovery.

Gold, Zinc

Moody’s Investors Service increased Peru’s rating to Baa3, the lowest investment grade and in line with the BBB- ranking from S&P and Fitch, in December. Moody’s is unlikely to raise Peru soon as “not much has changed since” it last upgraded the country, New York-based analyst Mauro Leos said in a telephone interview. Sebastian Briozzo, an S&P analyst in Buenos Aires, didn’t return a telephone call seeking comment.

Foreign-direct investment in mining and energy projects helped push growth to 6 percent in the first three months of the year from the year-earlier period, the fastest since the final quarter of 2008, according to government data.

Investment will jump to $7 billion this year and a record $8.4 billion in 2011 from $4.4 billion in 2009, according to Charlotte-based Bank of America.

Commodities account for 75 percent of Peruvian exports. Gold, the country’s second-biggest export, rose to a record $1,254.50 an ounce yesterday. Peru is the world’s second-largest copper exporter after Chile, third in zinc and tin, and first in silver.

‘Scorching Growth’

“Peru has seen a scorching growth recovery” since the economy bottomed with a 2.4 percent annual contraction in June 2009, Morgan Stanley economist Daniel Volberg wrote in a June 7 report. Morgan Stanley boosted its forecast for growth this year to 7 percent from 4.9 percent.

At 146 basis points, it costs $146,000 to protect $10 million of Peruvian debt against default for five years compared with a cost of $626,800 on Oct. 23, 2008, a month after the collapse of Lehman Brothers Holdings Inc. eroded demand for emerging-market assets.

Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.

Peru’s foreign debt equals 29.6 percent of gross domestic product, down from 38 percent in 2005 and 52.5 percent a decade ago, Fitch said in a report yesterday. Short-term debt equals 6.4 percent of GDP, Fitch said.

Fiscal Savings

Peru merits further upgrades after Garcia tapped fiscal savings for a $4.8 billion stimulus spending plan and the central bank cut interest rates to a record low to weather the global economic crisis, said Carola Sandy, an economist with Credit Suisse Group AG in New York. Moody’s, Fitch and S&P will likely wait until after April presidential elections to raise Peru’s rating, she said.

The poverty rate, which has remained above 30 percent since Garcia, 61, took office, is fueling voter discontent. In 2008, the most recent year for which statistics are available, poverty was 36.2 percent in Peru, compared with 25.8 percent in Brazil, according to the United Nations Economic Commission for Latin America.

Peruvians’ dissatisfaction with Garcia may boost the candidacy of Ollanta Humala, an ally of Venezuela’s Hugo Chavez who proposed raising corporate taxes and making the government a partner in all mining and energy contracts when he ran in 2006, Sandy said.

‘Dangerous’

Humala, 46, had the support of 13 percent of those surveyed by Ipsos, tied with former President Alejandro Toledo. Lima Mayor Luis Castaneda, with 22 percent support, is the frontrunner. He’s followed by Congresswoman Keiko Fujimori, who has vowed to pardon her father, ex-President Alberto Fujimori, in jail for his role in paramilitary massacres of rebel sympathizers.

Rating companies are probably waiting to see who leads the next government before moving to upgrade the country, Economy Minister Mercedes Araoz said at the Bloomberg Peru Economic Summit in Lima.

“It’s dangerous to upgrade before Garcia leaves office because you don’t know what’s going to happen down the road and if someone like Humala gets votes in the elections,” said Pedro Pablo Kuczynski, who was the country’s finance minister from 2001 to 2005 and is now a senior adviser to the Rohatyn Group. “Peru’s debt rating will be upgraded.”

‘Better Than Brazil’

The Andean nation’s dollar bonds yield on average 206 basis points more than U.S. Treasuries, compared with 242 for Brazil, according to JPMorgan Chase & Co.’s EMBI+ index. Brazil and Peru have the same investment grade rating from S&P.

“The market views Peru as better than Brazil because we have a much lower public debt and we’re a much more open economy,” Kuczynski said.

Peru’s mostly longer-term maturities and “pretty solid” mix of local and international bonds mean it’s less likely to face the financing squeeze that pushed down ratings in countries including Greece, Italy and Spain, Boquin said.

Italy needs 1.07 trillion euros ($1.28 trillion) by 2013 to refinance maturing debt, Spain must raise 546 billion euros and Greece needs 152.6 billion euros, according to a Bank of America estimate in May. Portugal and Ireland each have to raise about 80 billion euros, the data show.

“Peru has issued debt so far out that it isn’t going to have the same issue that other countries have,” Boquin said. “Peru doesn’t really have to worry about anything for the next decade or so.”

Bloomberg - Drew Benson and John Quigley

To contact the reporters on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net

OAS assembly attendees amazed with cebiche and lomo saltado

Papa a la huancaina, cebiche and lomo saltado were the most demanded dishes by the attendees at the 40th Organization of American States (OAS) General Assembly which ends today in Lima.

Peruvian chef Adolfo Perret Bermúdez, general manager of restaurants chain Punta Sal, was in charge of the important duty of representing the Peruvian cuisine.

Perret explained that one of the culinary stars of the OAS General Assembly was undoubtedly the papa a la huancaina, enjoyed by all visiting delegations and reporters.

Peru's General Directorate for Environmental Health (Digesa) worked very hard with the chefs, supervising how they worked, since Peru’s image was on the line.

Other dishes included in the buffet were cebiche, lomo saltado, causa limeña, and pollo a la brasa, as well as some fruits.

Clinton Tells OAS ‘It’s Time’ That Honduras Be Readmitted

Secretary of State Hillary Clinton said that Honduras should be readmitted to the Organization of American States, potentially putting the U.S. at odds with Brazil, Mexico and Argentina, Latin America’s largest economies.

“It’s time for the hemisphere as a whole to move forward and welcome Honduras back into the Inter-American community,” Clinton told delegates from 33 nations today in a speech at the OAS general assembly in Lima.

Honduras was expelled from the group after President Manuel Zelaya was ousted in June 2009 and put on a plane to Costa Rica. Some OAS members have refused to recognize the country’s new leadership after Porfirio Lobo was elected in November, saying the ballot was administered by a coup-installed government.

“We saw the free and fair election of President Lobo, and we have watched President Lobo fulfill his obligations,” Clinton said. She added that he had formed “a government of national conciliation and a truth commission” and has shown “a strong and consistent commitment to democratic governance and constitutional order.”

Member states want Honduras to return quickly to the organization though there is disagreement on whether the membership should be conditional on allowing Zelaya to return to the Central American country without fear of arrest, Secretary General Jose Miguel Insulza said yesterday in opening remarks.

Last year’s OAS resolution to readmit Cuba if it meets a set of conditions could provide a framework for the readmission of Honduras, said Christopher Sabatini, a senior policy director at the Council of the Americas in New York.

Compromise Possible

“There is likely to be some sort of compromise,” Sabatini said, speaking by telephone from New York. “There could be some conditions and stipulations that will give cover for Brazil and Argentina and Mexico to climb down and save face.”

Cuba has been suspended from the OAS since 1962. The organization voted to revoke the 1962 suspension of Cuba if the country meets OAS standards for democracy and human rights.

A spokesman for Zelaya said today in a letter to the OAS that the group shouldn’t readmit Honduras while alleged human rights abuses, including killings of journalists and coup opponents, have gone unpunished.

The truth commission looking into the coup will only whitewash the overthrow of Zelaya, said the letter, written by Zelaya’s aide Rassel Tome and addressed to Insulza.

Zelaya has been in exile in the Dominican Republic since Lobo took office in January.

Brazilian President Luiz Inacio Lula da Silva said in February that the region shouldn’t allow Honduras to set a precedent of calling elections after a coup.

“We shouldn’t even joke about allowing military juntas to prevail,” Lula said. “Suspending Honduras was the most correct and democratic decision we made.”

Clinton is in Peru as part of a four-day trip to the region, which also includes visits to Ecuador, Colombia and Barbados.

Bloomberg - Matthew Bristow and John Quigley

To contact the reporter on this story: Matthew Bristow in Lima at mbristow5@bloomberg.net; John Quigley in Lima at jquigley8@bloomberg.net

Solid announces option to acquire Peru gold, copper property

Solid Resources announced it has entered into a binding option agreement with an arm's length third party pursuant to which it acquired the option to purchase a metallic mining license, covering an area of 1,000 hectares, located in Northwest Peru.

Under the terms of the option agreement, Solid has the right to purchase the license, during the three year term, by paying the Optionor a total of US$500,000, to be paid in tranches over the course of the period ending on December 2012.

The first cash payment of US$4,000 has already been paid to the Optionor. In connection with the option agreement, Solid has agreed to pay 1,000,000 common shares of Solid to a third party finder, subject to approval of the TSX Venture Exchange.

Solid intends to conduct a drilling campaign on the property during the summer of 2010. The exercise of the option will be subject to acceptance by the TSX Venture Exchange.

Mr. Joerg Schuetz, CEO states, "I am pleased to report another step to achieve our plans. It is the goal of Solid to diversify and add other prospective properties to our portfolio. Additional information with respect to the property, including test results, will be disclosed in the near future." (Andina)

Nyrstar Seeks to Buy Mines in Peru, Elsewhere in South America

Nyrstar NV, the world’s largest zinc smelter, is seeking to acquire mines in South America to secure raw materials after buying a project in Peru last year.

“Peru and South America will be an interesting place for us to explore additional opportunities,” Michael Morley, legal and external affairs director, said today in an interview. The company may also look beyond the region, Morley said.

The company, based in Balen, Belgium, agreed in October to buy 85 percent of the Coricancha mine in Peru from Gold Hawk Resources Inc. for $15 million. Nyrstar is ramping up output at idled mines it bought last year after resuming full production at its Balen smelter by the end of the first quarter. Zinc prices more than doubled in 2009 as the world economy recovered.

“Rather than acquiring a number of relatively smaller assets in different parts of the globe we take a cluster approach aimed at building critical organizational and operational mass in certain areas,” Morley said.

Nyrstar’s mines, including an interest in a site owned by Finnish nickel producer Talvivaara Mining Co., can supply about 21 percent of its raw material needs at full output, he said.

Nyrstar agreed in January to pay $335 million for all of Talvivaara’s zinc concentrate output until 1.25 million metric tons has been delivered.

Bloomberg

To contact the reporter on this story: Firat Kayakiran in London at fkayakiran@bloomberg.net

Peru’s Rating Outlook Raised to Positive by Fitch

Peru’s credit-rating outlook was boosted to positive by Fitch Ratings, which cited the Andean country’s “solid” economic recovery and fiscal discipline.

Fitch raised the outlook on the country’s BBB- rating, the lowest investment grade, from stable. Fitch last changed the rating in 2008, when it lifted it from BB+.

“The outlook revision to positive reflects a resumption of Peru’s healthy growth trajectory, which is underpinned by disciplined macroeconomic policies,” Fitch said.

Bloomberg

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net