Peru to Maintain Silver Sales Freeze

Energy and mines minister, Wilfredo Huayta, said Peru would maintain its freeze on new sales of silver until the price of the precious metal reaches “the true value this raw material should have.”

He spoke to reporters at the presidential palace after meeting president Alan Garcia, whom he said recently spoke by telephone with Mexican president Miguel de la Madrid. Mexico and Peru are the world’s two largest silver producers.

Huayta, asked what the true price level of silver should be, repled: “well, this cannot be predicted.”

He said Minero Peru Comercial (Minpeco), the government’s minerals marketing arm, would closely study the price of silver in the world market.

Last Tuesday, the government instructed Minpeco, which handles all Peru’s exports of refined silver and state- produced ore, to immediately freeze all new silver sales until the metal’s price reached equilibrium in the world market. Peru plans to produce 63 mln ounces of silver this year, and is the largest producer of the precious metal after Mexico. Huayta said both nations’ central banks would coordinate their work, but did not elaborate how they would do this. Peruvian central bank president Leonel Figueroa and the head of Bank of Mexico, Miguel Mancera Aguayo, met in Mexico City yesterday to coordinate actions aimed at consolidating the upward trend in the price of silver, the official newspaper El Peruano said today.

Huayta said his Mexican counterpart, minister of oil, mines and parastatal industry, Alfredo del Mazo, should be in Lima on a visit at a nearby date. Huayta added Peru did not want to see great fluctuations in the price of silver, but declined to comment on what Peru would like to see as a ceiling for the precious metal’s price. Silver bullion climbed to nearly 10.00 dlrs an ounce today from about 5.70 dlrs an ounce a month ago.