Peruvian’s President-Elect Ollanta Humala’s proposed mining windfall tax won’t make the Andean country less competitive for investment capital, said central bank president Julio Velarde.
The suggested tax on Peru’s mining industry, the world’s third-largest copper and zinc producer, should be “carefully studied,” said Velarde. Humala, who takes office July 28, pledged to raise taxes after copper and gold prices surged to record levels this year.
“If the mining tax regulation that’s introduced allows the industry to remain competitive, mining investment will continue, albeit with delays,” Velarde said today at an event in Lima. “Clear signals are needed for confidence to recover.”
Investment has slowed over the past three months in Peru amid concern over Humala’s proposals, Peru’s National Society of Mining, Petroleum & Energy said July 7. As much as $42 billion in investment that aims to quadruple copper output by 2020 may be shelved if Humala changes investment rules, the group’s president Pedro Martinez said.
Velarde has said he will “think about it” if asked to stay on in his position after Humala takes office.
Peru’s mining export revenue rose 27 percent to a record $21 billion last year as copper tripled from 2008 and gold jumped 76 percent. Copper futures for September delivery fell 4.4 cents, or 1 percent, to $4.368 a pound on the Comex in New York. Gold for August delivery gained $7.60, or 0.5 percent, to $1,549.20 an ounce.