Policy of Gold Financing

Nonetheless the country has a good law on auriferous promotion, as opposed to what occurred in neighbor countries such as in Ecuador, Brazil, Chile and Bolivia and these capital flows are minimum or cut off.

Due to changing set backs, the national mining companies do not have the economic surpluses for their reinvestment in auriferous mining. It is also worth mentioning that during 1985 to 1987 the auriferous producers only received sixty percent of the real value of the dollar. Starting from April 1987 was established at a fair price for the dollar plus a 15 percent award.

Commercialization
The policy of oscillating commercialization does not allow a planned and stable development of the mine, especially when considering that the prices of gold, as well as with the other metals, are fixed by the international markets and this is where the Peruvian producers go to in competition with other mining companies that do get an actual dollar for their products and this was a situation that placed the country in a disadvantage with the rest.

This panorama can change as the state pays the producer the real price of their product. At the same time, reestablishing the incentives for the reinvestments, as they were contemplated in the auriferous law of promotion. With the prevailing system, national investors lack of incentive to save and invest in auriferous mining because the interest rates offer annual interest rates that are very below inflation.

Because of this situation they are more motivated to invest their savings in dollars in the grey market and this does not help production, to the contrary, it feeds fuel to the fire of inflation.

Investments
One contribution to counteract this adverse situation to the national interests would be the establishment of gold bonds.

These would have as an obligatory norm to establish the resources that sell them and they should be used to constitute a auriferous investment fund.

In the same way, the commissions their placements generate will need to be reinvested into the same fund. These gold bonds would have multiple advantages for the country and can be appreciated in the financial auriferous aspect.

It would also be a good idea to mention that the central reserve bank should endow the Mining Bank of a specific line of financing for auriferous mining since it is of national interest. On one hand, this banking institution should organize a small group of work that examines in a practical way and in a realistic way the potentiality and the amounts of investment that the known of mines require.

Technology
It is important to point out that there are a good number of professionals and technicians that are involved in the prospecting business, exploitation of mineral, metallurgy, building of roads, perforation of mines, electric plants; some of them due to the absence of an adequate national scenario are working overseas which shows us that mining in this country does have qualified human resources in order to develop its natural resources.

In as much as is possible, the Mining Bank should have an adequate stock of cyanide, active carbon, mercury etc and other basic products that be sold to producers at a cost price with a proportional turn in program to the sales of gold of each producer.

We could also supply credit for the perforation of water wells in the desert zones, which would make possible the opening of a great number of mines on the coast of the country.

As can be seen, the miners can overcome the technological problems of gold but they require of the support of the government in the political terrain to promote mining investment both national and foreign so that their mining operations can develop and grow.

It is hoped that this information that sums up the variables of the economic situation and the policies of auriferous mining and that it serves as a base to all the different political parties and the government to carry out a program of urgent measures in order to promote mining investment and bring the country out of the danger of a deficit of foreign currencies and inflation.

As we have been able to observe that several political formulas have been tried for mining and since its reactions and economic and social effects are known and have placed this country behind other countries and because of this the same mistakes should not be repeated. It is in the interest of the representatives of the country, to the legislative and executive leaders to start an immediate plan of action that will allow the country to develop a great amount of auriferous mining that is not being taken advantage of.