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Peru Mining Stocks Plunge as Humala Claims Election Victory

June 6 (Bloomberg) -- Cia. de Minas Buenaventura SA led a plunge in Peru’s mining stocks as former army rebel Ollanta Humala claimed victory in yesterday’s presidential election.

Buenaventura, Peru’s largest precious-metals miner, sank the most since December 2008, retreating 11.7 percent to $37.10 in Lima on concern that Humala will raise mining royalties and increase government control over natural resources. The bourse twice suspended trading, ending the session three hours early after the Lima General Index fell the most since at least 1990.

“Investors don’t like this candidate,” Jose Luis Bustamante, head of trading at Cartisa SAB, said today in a telephone interview. “They’re worried that many of the mining companies’ new projects won’t happen now.”

Humala pledged to extend Peru’s mining boom to the poor during his campaign and said in a March 23 interview that he will levy a mining windfall tax and renegotiate contracts believed to be “hurting the country’s interests.” In recent weeks, he sought to reassure voters by defending policies that have made Peru the fastest-growing economy in Latin America over the past decade.

Humala, 48, leader of the Nationalist Party and a one-time ally of Venezuelan President Hugo Chavez, had 51.4 percent of votes compared to 48.6 percent for Congresswoman Keiko Fujimori with 94 percent of ballots counted.

Mine Seizure

Southern Copper Corp., Peru’s biggest copper producer, fell 9.9 percent to $31.40 in Lima. Sociedad Minera Cerro Verde SA, a unit of Freeport-McMoRan Copper & Gold Inc., declined 10 percent to $35. Volcan Cia. Minera SAA, Peru’s largest zinc producer, plunged 15 percent to 2.65 soles.

Humala, who led a group of fellow army soldiers that seized and occupied Southern Copper’s Toquepala mine for a week in 2000 to protest corruption in the government, softened his rhetoric against mining companies this year after trailing in the polls, saying he will seek consent from investors for any policy overhauls.

The ex-rebel hired two of former Brazilian President Luiz Inacio Lula da Silva’s campaign advisers during the campaign and said he will seek closer ties with Latin America’s largest economy to fuel Peru’s growth.

Mining companies will want proof of Humala’s new conciliatory stance, Alex Black, chief operating officer of Calgary-based gold miner Rio Alto Mining Ltd., said in a June 2 interview.

“We’d want Humala to consult the industry about any changes and not just push them through in a decree,” said Black, who plans a $330 million expansion of the company’s La Arena gold and copper mine by 2015. “We hope he will be more of a Lula-type government than a Chavez copy.”

Southern, Cerro Verde, Volcan and Buenaventura all plan to build new mines in Peru, where the Energy & Mines Ministry has lined up $41 billion in mining investment through 2017.

To contact the reporters on this story: Alex Emery in Lima at; Leon Lazaroff in New York at

To contact the editor responsible for this story: David Papadopoulos at

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