Peru looks to stimulate its mining industry

Peru, despite the significant growth in its mining industry over the last year, is worried about attracting investment for new mining projects. Luis Chang Ching, an ex-congressman and current professor at Centrum Católica, proposed that the government lower its tax on mining profits to just 15% in order to encourage new investment.

He warned that declining international metal prices will drive investment to neighboring Chile, where the tax on mining profits is half of what it is in Peru. Chang Ching stressed that, “They have not understood that the only sector that can drive the Peruvian economy is mining, there is no other, but the high taxes can cost its competitiveness.”

The turbulence in Peru’s mining industry has also attracted the attention of The Economist. The magazine published an investigative piece on Peru’s mining industry, reporting on the social conflicts that shut down several large mining projects in recent years. According to The Economist, “so far the farmers are winning.”

The article that went on to explain the dynamics of the mining industry through the continent over the last twenty years, starting with a boom in open-top mining projects during the 1990s. In recent years, however, with new laws guaranteeing local communities a right to prior consultation, locals have gained in power.  Ultimately, the article predicts that the end of the mining boo will likely increase both local and government support for large mining projects.