Shares of Hochschild Mining were down around 8% on Tuesday, after collapsing 27% a day earlier after Peru's government indicated that it would not approve operational extensions for its flagship Inmaculada silver mine. The slide continued despite a crunch meeting late on Monday between the government and the powerful National Society of Mining, Energy and Oil, which both sides said had been "very productive." Peru's prime minister, Mirtha Vasquez, sparked anger in the sector and triggered the Hochschild sell-off when she said on Friday that several mines would not be granted further operational extensions due to environmental concerns.
LIMA (Reuters) -Shares of Hochschild Mining collapsed 27% on Monday after Peru's government ruled out https://www.reuters.com/world/americas/peru-pm-sparks-controversy-with-mining-sector-by-ruling-out-timeline-extensions-2021-11-20 any operational extensions for its flagship Inmaculada silver mine, but mining executives and government officials also said they had had a "productive" late night meeting to ease tensions. Mining is key to the economy of Peru, which is the world's No. 2 producer of copper and silver. Peru's prime minister, Mirtha Vasquez, said on Friday that a group of four mines - including two owned by Hochschild - would not be granted any further operational extensions due to environmental concerns and would instead close down in the near future.
Hochschild, which operates mines in South America, will demerge 80% of Aclara's shares as part of the deal while keeping the remaining stake in the company it acquired in 2019. "Each (Hochschild and Aclara) will have their own strategic focus on their respective products, their own dedicated management teams, separated access to capital and an independent valuation," Hochschild Chairman Eduardo Hochschild said in a statement. Following the demerger, Ramon Barua will step down as chief financial officer at Hochschild to take over as the chief executive of Aclara.