CASE STUDY : INVESTMENT IN IRON ORE PROJECT, CUSCO REGION, PERU
BACKGROUND
- Australian mining investor with extensive iron ore experience internationally invited to invest in an emerging iron ore project in Peru
- Peru a victim of previous leftist insurgency (Shining Path – Sendero Luminoso) with residual national drug cartel criminality (including kidnap) concerns
- Project 1 located at high altitude in the Andes (14,000’/4,200 metres above sea level) accessible from Cusco over 2 days by road or 90 minutes by helicopter, and Project 2 located along a remote section of the southern Pan American highway, towards the border with Chile
CLIENT REQUIREMENTS
- Technical team to be escorted to upcountry Peru (from Cusco to a remote Andes mountain location) to assess the project facilities, resource, ease of access, and general security situation
- Ensure the safety and security of the expatriate technical team including the corporate CEO both in the mountains and while conducting an additional project reconnaissance along a remote southern section of the Pan-American highway (Carretera Panamericana Sur)
PROJECT OUTCOMES
- Effective engagement with national project ownership to communicate provisional investor interest
- Analysis completed of the historical causes of the Shining Path conflict and an assessment of the likelihood of any resumption of disorder through political upheaval, and/or criminal threat from drug cartel activities.
- Assessment of Government approach to foreign investment completed.
- High altitude visit to Andes Mountains project site by local charter helicopter, return to Cusco, then deploy to a reconnaissance by vehicle of southern Pan American highway project, towards Chile border
- Safe return to the capital Lima and departure of foreign expatriate team. No client interest in the project based on in-depth analysis of risk, general investment climate and the remoteness of the resource.