Peru targets copper price windfall

LIMA: Peru, the world’s number two copper producer, will target “excess profits” that mining firms have gained from soaring global metals prices for extra taxation, the country’s economy minister says.

While President Pedro Castillo came to power last July pledging to increase taxes on the powerful mining sector, the current plan is far less ambitious than initial promises of sharp tax hikes that met fierce resistance from the industry and a divided Congress.

“The focus is on the surplus profits,” Oscar Graham, the country’s minister of economy and finance, said in an interview in Lima late on Friday.

He added that the government was looking at an “adjustment” to taxes.

Copper prices are currently trading at near record levels around US$10,000 (RM42,000) per tonne in the wake of Russia’s invasion of Ukraine.

“The margins (of the adjustment) are being evaluated,” he said, but added it was important that the sector did not lose competitiveness and that mining investment was not discouraged.

Graham said Peru needed better distribution of mining wealth to communities to quell mining protests that have rocked the sector and stalled production at key mines such as MMG Ltd’s Las Bambas and Southern Copper’s Cuajone mine.

“We have to look at the issue of the efficient use of resources provided by mining, otherwise we will have recurrent conflicts in the country,” he said.

Graham also said Peru faced risk from any “prolongation” of the war in Ukraine, with domestic prices having risen at their fastest pace in a quarter of a century in March.

“We are net importers of oil and corn, which form the chain of inputs that most affect the family basket,” he said. — Reuters

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