According to Peru’s Minister of Finance, Luis Miguel Castilla $30 billion in mining investments is secured for the next five years, following the agreement reached last week between the Peruvian government and mining companies for the payment of a mining tax.
"Talks with the Society of Mining, Petroleum and Energy have been very productive, which will ensure a flow of at least $30 billion in investments during the next five years," he said in an interview with Frecuencia Latina, and quoted in Andina.
The government of President Ollanta Humala reached an agreement with mining companies, where they will pay the government a tax of S/. 3 billion a year.
This new tax is expected to raise S/. 15 billion in the next five years.
Castilla said that this agreement would achieved three objectives: to maximize resources for the state, affect the competitiveness in the mining sector and maintain legal stability.
He added that through a tax scheme, companies that earn more contribute more and those earning less contribute less.
Castilla explained that this tax would follow a single scheme for the mining sector, regardless of the type of metal being mined.
"But the idea is to go for mining projects, not by company; if there is any rise in the price of a metal it can offset the decline in the price of another," he said.
He noted that the tax issue is not the sole determinant for a company to invest in the country, as there are other factors affecting the decision to mine or not, in Peru.
"Soon there will be new announcements of substantial investments. They were waiting for a definition of terms from the new government, which has already happened, and that removes a very important source of uncertainty. I think this will allow the flow of investments," he said.
The minister said that this agreement between the government and the mining was reached after arduous hours of work.
Castilla noted that mining is a driving force of Peru’s fiscal budget, since about 40 percent of government revenue depends on mining.
"Mining contributes about two points in the growth of Gross Domestic Product,”he said.
According to Peru’s Minister of Finance, $30 billion in mining investments is secured for the next five years, following the agreement reached last week for a new mining tax.