(Adds reaction from mining association, context on economic reform package and slowing economy)
LIMA, June 19 Peru's President Ollanta Humala proposed a new tax stability contract for mining companies that would lock in taxation rates for 15 years on investments of at least $500 million, legislation published on Thursday showed.
The measure is part of a package of reforms Humala is asking Congress to pass urgently to boost private investment in the Andean country as its economy slows on a drop in mining exports.
The legislation broadens existing tax stability contracts as well to cover additional investments, such as mining expansions.
Humala's ruling party usually finds support from opposition lawmakers in to push his economic proposals through Congress.
Global mining companies rolling out big projects in Peru in the coming years, such as Southern Copper, MMG Ltd and Newmont Mining, would likely benefit under the new tax stability system, said Jose Miguel Morales, the director of Peru's main mining association.
"It's a good legislative proposal that will promote investments," Morales said, adding that more should also be done to encourage local companies and smaller projects.
Other measures in the reform package unveiled by Humala's government last week include redoubling efforts to reduce red tape, improving transparency and relaxing environmental regulations.
The credit ratings agency Moody's Investors Service said earlier this week that the reforms were "credit positive," as they would put Peru on track to boost potential output without increasing spending.
Peru's economy, which expanded by more than 6 percent during most of the past decade, grew by 4 percent in the first four months of 2014 from the same period a year earlier.
The finance ministry and central bank, which initially predicted an economic rebound early this year, have said they now expect to see stronger growth in the second half of 2014.
Mining makes up about 15 percent of Peru's gross domestic product and 60 percent of the Andean economy's total exports.
The global copper, gold and silver exporter has a mining investment pipeline of more than $60 billion, according to data from the energy and mines ministry. (Reporting by Marco Aquino; Editing by James Dalgleish and G Crosse)