September 28, 2011 / 10:51 PM / in 8 years

Peru's Humala signs bills to raise mining taxes

 * Government secures some $1 billion per year in funding
 * Rates negotiated with miners to preserve competitively
 LIMA, Sept 28 (Reuters) - Peru's leftist President Ollanta
Humala signed three bills raising taxes and royalties on the
lucrative mining sector into law on Wednesday, fulfilling a
campaign promise.
 The government plans to use the new source of funds,
estimated at $1 billion per year at current metals prices, to
build roads and schools to fight rural poverty. It says the
taxes won't affect the vital sector's competitiveness.
 "These resources will be used primarily to fund
infrastructure in the poorest parts of the country as a way to
bring social inclusion," said Humala, who took office in July
promising to spread the benefits of rapid economic growth.
 Miners will now pay royalties of between 1 percent and 12
percent of their operating profits and a a windfall profits tax
of 2 percent to 8.4 percent of their net profits. They
currently pay royalties of 1 percent to 3 percent of sales. 
 Mining companies protected by tax stability agreements
signed with the government in the 1990s and do not currently
pay royalties will be charged a "special contribution" of
between 4 percent and 13.12 percent of their operating profits.
For details see [ID:nS1E78J0WD]
 Humala's team negotiated the new rates with mining firms
 before sending the bill to Congress earlier this month.
 "I welcome this responsible attitude that shows Peru is a
place where communities and businesses have a common
perspective of well-being," Humala said.
 Though they agreed to the rates, miners have warned that
further increases could affect the sector's competitiveness in
the world's No. 2 copper and silver producer.
(Reporting by Teresa Cespedes, Patricia Velez and Caroline
Stauffer; Editing by David Gregorio)

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