Peru's only iron ore miner, Shougang Hierro Perú, said that if the nation's congress chooses to form a committee to question the company's 1992 privatization, doing so could undermine a US$1bn expansion to double capacity over the next three years.
In the midst of congressional deliberations on whether to form a committee to investigate possible irregularities in the Shougang privatization process, the company has sent a letter of complaint to congressional president Javier Velásquez Quesquén.
"This has concerned somewhat our headquarters in China, which has chosen to carry out such an important [expansion] project," Shougang Hierro Perú general manager Raúl Vera told BNamericas in a telephone interview.
Shougang is not pleased that Peru's government is discussing for the third time the legitimacy of the privatization, particularly taking into account that in the 16 years since, two such committees were formed and did not find any conclusive evidence of problems with the transaction, Vera said.
The executive specified, however, that on the whole the relationship between Shougang and Chinese businesses in general with Peru's government has been positive in recent years and that the incident will not likely change that.
Shougang is planning to double the capacity of its iron ore operation in the Marcona area of Ica region to some 16.0Mt/y starting in mid-2010.
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