Mineral industry of Peru

[15] In addition, the Fujimori administration installed a new tax regime that exempted mining corporations from taxation and paying royalties until they regained their initial investments.

[15][12] Fujimori also spearheaded other reforms that removed restrictions on profit/capital remittances, eliminated performance requirements for foreign investments, reduced tariffs on imports and removed tariffs on exports, established simpler licensing procedures, modified policies regarding indigenous land tenure, lowered taxes, liberalized the capital market, and privatized state firms and financial institutions.

015-2004-PGM of January 2004 (legal framework for decentralization) was established to use revenues from mineral production to maximize the well-being of the local communities through economic growth, environmental protection, and social development in a sustainable way.

26844 of May 1997 eliminated the exclusive rights of the state-owned Petróleos del Perú S.A. to control the secondary recovery of crude oil, refining, and imports and subsequent resale of petroleum and byproducts.

The Peruvian laws have attempted to ensure more-favorable minerals and crude oil and gas exploration and production contract terms for investors.

In the legal framework for investment and taxation, no distinction is made among domestic and foreign investors, corporations, joint ventures, and consortia formed in Peru or abroad.

To increase protection of investors’ interests, Peru signed agreements with the World Bank's Multilateral Investment Guarantee Agency in April 1991, which was authorized by Legislative Decree No.

In 2006, metal prices were also driven upwards because of the higher consumption associated with increased world economic activity, such as in China, the United States, and other countries.

[11] Metal production growth was mainly led by an increase in copper, iron, silver, and lead, which offset the decreased output of gold, molybdenum, and zinc.

Owing to these terms, an increased number of domestic and foreign companies, AngloGold Ashanti, Barrick Gold, BHP Billiton, Cambior, Falconbridge, Mitsui & Co, Mitsubishi, Peñoles, Teck Cominco, and others, have expressed interest in participating in prospecting, exploration, production, and distribution of natural gas and petroleum contracts with Perupetro and mineral properties with Centromín.

[11] The new operating process, which was the result of the privatization and joint-venture projects, incorporated policies that deal with economic and societal development issues and with environmental protection in a sustainable way.

The Peruvian Government raised about $2 billion from the privatization of its electrical sector and committed to an investment of about $20 million to install an additional 1,006 MW of capacity in the immediate future.

[11] Owing to China's increasing consumption of metals and minerals such as copper, which was expected to increase to 6 Mt by 2010 from 4 Mt in 2005, two Chinese companies, Baosteel Co., Ltd. (Baosteel) and Aluminum Corp. of China Ltd. (Chalco) were planning to have joint ventures with Latin America's leading copper mining companies such as Companhia Vale do Rio Doce (CVRD) of Brazil, Corporación Nacional del Cobre (Codelco) of Chile, and Sociedad Minera Cerro Verde S.A.A.

Almost 60% of the country's crude oil production came from the jungle blocks in the Loreto and the Ucayali Regions; the remainder was produced at the coastal and offshore fields in Talara.

[11] The mineral industry in Peru has exerted several adverse impacts on the environment, including reduced quality and quantity of water supplies and changes in habitat for plants and animals.

[18] Runoff from mining operations often contaminates local water supplies with substances such as copper, iron, zinc, manganese, mercury, arsenic, lead, cadmium, cyanide, and selenium, further threatening rural populations' main sources of sustenance.

[18] Mining operations often produce substantial soil erosion, thus degrading the grazing lands that local populations rely on for herding and livestock activities.

[24] After corporate and government authorities failed to acknowledge their concerns, community members responded by occupying Buenaventura's premises and burning much of its property.

[25] The townspeople sought to call attention to the 2,070 children living in the area with extremely dangerously high blood levels of lead, above 10 micrograms per deciliter.

[13] Corporations attempt to compensate for these changes through the price they pay for using the land, offering employment to the local population, and implementing community development programs.

[23] A 2004 study found that benefits from these programs were unevenly distributed and that mining in the area had reduced community members' access to social and natural capital that had previously been important to their livelihoods.

[24] In January 2012, the Humala administration established an international commission with the task of identifying ways to reduce the environmental effects of the Newmont Mining Corporation's Conga project.

[24] When government officials presented the new terms to local community members in order to gain their consent, they were faced with considerable opposition and violent protests ensued.

[24] In April 2022, the country's prime minister announced that Peru will declare a state of emergency to restore copper production in Cuajone mine.

Protesters complained that despite high global prices, nearby communities do not receive enough financial compensation, and therefore they demand a share of future profits.

[26] There are several potential solutions to the corporate-community conflict surrounding Peru's mineral industry, including environmental licensing, the documentation of accountability, and the use of a local legitimacy strategy.

[24] It has cleaned up abandoned mine sites, implemented a water management system, worked to restore soil conditions, and established a ranch for the purpose of herding and livestock activity.

[24] The energy, mining, and related industries are expected to continue to attract capital flows via joint ventures and consortia, privatizations, and direct acquisitions.

Higher demand for copper, gold, iron ore, and silver and high metal prices are likely to encourage mining companies to invest in expanding and modernizing their operations.

[11] At the national level, this trend could reduce the attraction of new investments and preclude Camisea's higher output needed for the regional economic development.