"In 2009, Peru occupied a leading position in the global production of the following mineral commodities: copper (second after Chile), gold (sixth after China, Australia, South Africa and the United States, and Russia), lead (fourth after China, Australia, and the United States), molybdenum (fourth after China, the United States, and Chile), silver (first followed by China and Mexico), tin (third after China and Indonesia), and zinc (second after China). In Latin America, Peru was first in the production of bismuth, gold, lead, silver, tellurium, tin, and zinc, and second in the production of cadmium, copper, molybdenum, and selenium.
The stability of the Peruvian judicial framework has been fundamental to encouraging investments in the mining sector. The total committed investment in the mining sector for the period 2009-16 was $35.5 billion. In 2009, the leading destination markets of Peruvian exports as a percent of total exports were the United States (17.4%), China (15.3%), Switzerland (14.9%), Canada (8.7%), Japan (5.1%), Germany (3.9%), Chile (2.8%), and others (31.9%)."
Source: USGS 2009 Minerals Yearbook - Peru Advanced Release
Peruvian Mining Law
Under Peruvian law, the Peruvian State is the owner of all mineral resources in the ground. Rights over such mineral resources are granted to particulars by means of the "Concession System". The Concession System provides for the existence of four (4) different types of concessions for the mining industry, which grant the titleholder the right to perform different activities related to the mining industry, as follows:
Mining Concessions, which grant their titleholder the right to explore and exploit the mineral resources located within the boundaries of said concession;
Processing Concessions, which grant their titleholder the right to extract or concentrate the valuable part of an aggregate of minerals extracted and/or to smelt, purify or refine metals;
General Work Concessions, which grant their titleholder the right to provide ancillary services to two or more mining concessions; and,
Mining Transport Concessions, which grant their titleholder the right to install and operate non conventional continuous transportation systems for mineral products between one or several mining centers and a port or processing plant, or a refinery or one or more stretches of these routes.
Mining concessions are considered immovable assets and are therefore subject to being transferred, optioned, leased and/or granted as collateral (mortgaged) and, in general, may be subject to any transaction or contract not specifically forbidden by law. Mining concessions may be privately owned and no minimum state participation is required. Buildings and other permanent structures used in a mining operation are considered real property accessories to the concession on which they are situated.
In June 2004, Peru's Congress approved a bill to allow royalties to be charged on mining projects. The royalties are levied on a Peruvian mine's annual sales of minerals in refined, semi-refined or concentrate form according to the international market value of minerals at the following rates:
1.0% for sales up to US$60M;
2.0% for sales between US$60M and US$120M; and
3.0% for sales greater than US$120M.
Taxation & Foreign Exchange Controls
Corporate net income is taxed at a rate of 30% of annual net income, subject to an additional 4.1% withholding tax at the time profits are distributed to shareholders. There are currently no restrictions on the ability of a company operating in Peru to transfer dividends, interest, royalties or foreign currency to or from Peru or to convert Peruvian currency into foreign currency.
Congress has approved a Temporary Net Assets Tax, which applies to companies subject to the General Income Tax Regime. Net assets are taxed at a rate of 0.5% on the value exceeding Nuevo Sol 1,000,000 (approximately US$300,000).
The General Mining Law provides to holders of mining rights the option of signing stability agreements with the Peruvian Government in connection with investments made to commence new mining operations or expand existing mining operations. Mining companies can obtain two complementary regimes (generally it is suitable that one company/operation have both regimes) of legal stability, the "General Legal Stability Agreement", which is signed with PROINVERSION, a government agency to encourage private investments; and the "Mining Guarantee Agreement", that is specific for mining companies.
Source: The La Arena Project, Peru Technical Report (prepared by Coffey Mining Pty Ltd on behalf of Rio Alto Mining Limited - effective Date 31 July 2010)
PRODUCING GOLD MINES IN PERÚ'S NORTH-CENTRAL MINERALIZED BELT
PRODUCING BASE METAL MINES IN PERÚ'S NORTH-CENTRAL MINERALIZED BELT
* Brought into production after the adoption of the new mining law in 1991.