The market value of Hochschild Mining dropped by more than a quarter on Monday after Peru moved to close two of its mines on environmental grounds, deepening a clash between the mining industry and the left-leaning government.
Shares in the FTSE 250 company closed 27 per cent down having initially lost more than half their value following prime minister Mirtha Vasquez’s weekend announcement that four mines in the southern Ayacucho region, two of which are owned by Hochschild, would be “closed as soon as possible”.
Hochschild said on Monday it would “vigorously defend its position” and that its mines operated under the “highest environmental standards”. The intervention by the government of President Pedro Castillo, will send a chill through the mining sector. The South American country is the world’s second-biggest producer of copper and a significant source of gold, silver, zinc and tin.
Anglo American, Newmont, Glencore and Freeport-McMoRan also operate mines in the country, as do Chinese-controlled companies including MMG and Chinalco and local producers such as Buenaventura.