Peruvian Mining Windfall Tax Accord to Be Signed This Month

Peru and mining companies may reach an agreement on a windfall tax for the industry before the end of this month, Energy & Mines Minister Carlos Herrera said.

“Both sides agree the proposal should be finished as quickly as possible,” Herrera told state-run station Peru TV. “The mining sector has understood the importance of making a greater effort to contribute to the country’s development.”

The cabinet of President Ollanta Humala aims to announce the accord at its presentation before Congress between Aug. 22 and Aug. 25, Herrera told the channel today. The Andean country is the world’s third-largest copper and zinc producer.

Humala, a former army rebel, is seeking to reassure investors that his plans to raise mining royalties and tighten state control over natural resources won’t erode growth and postpone $42 billion in mining investments. The new tax on operating profits will be similar to Chile’s and won’t make Peru less competitive, Finance Minister Miguel Castilla said Aug. 10.

Peru’s first-half mining export revenue jumped 31 percent to $13.2 billion as copper jumped 46 percent and gold rose 21 percent from a year earlier.

Copper futures for December delivery rose 3.8 cents, or 1 percent, to $4.053 a pound at 1 p.m. on the Comex in New York. Gold futures for December delivery rose to a record, gaining $8.80, or 0.5 percent, to settle at $1,793.80 an ounce at 1:41 p.m. on the Comex in New York.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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