Peru's gold production could drop by 60,000 ounces in one month due to mining ban

According to Bloomberg, Peru's gold production is expected to drop significantly in the coming month due to a mining ban in the country's northern region. The government has taken extreme measures to curb a surge in criminal activity.

Peru's central bank estimates that companies affected by this ban would lose about 60,000 ounces of the yellow metal in 30 days, worth approximately $200 million at current prices. This volume represents about one-fifth of the country's total production in February, Bloomberg reports. So, the damage from the production shutdown in the northern region of Peru would be rather tangible, says Adrian Armas, the central bank's chief economist.

Cia Minera Poderosa, which operates a large gold mine in the area affected by the government's measures, will be hit hardest. In February, it produced roughly 24,000 ounces of the precious metal. However, this is not the first time the mine has been linked to conflicts and illegal activities.

Peru’s mining industry association (SNMPE) has expressed dissatisfaction with the government’s decision to ban all mining activities in the northern region.