Peru Mining Industry Fiscal Regime Analysis including Governing Bodies, Regulations, Licensing Fees, Taxes and Royalties, 2022 Update

Pages: 22 Published: June 10, 2022 Report Code: GDMMFR0210MR

Peru is rich in minerals and a major producer of base and precious metals. The Peruvian mining industry plays a significant role in the country’s economic development. In 2021, the mining industry contributed to the growth of the national economy post-covid pandemic. Peru is the second-largest copper producer in the world and also produces gold, silver, and zinc, among other minerals. The mining industry in Peru is regulated by laws such as General Mining Law, Mining Canon Law, Law Regulating Environmental Liabilities of Mining, and the General Law of the Environment.

Mining license holders are required to pay Mining Concession Fees every year and satisfy the minimum production criteria, failing which can attract penalties and may result in the extinction of rights. There are provisions of tax incentives, tax loss relief, and capital allowances, which can be used by mining entities based on the fulfillment of certain conditions. Competitive costs and tax framework, coupled with favorable trends in metal commodities, make Peru an attractive place for investors to develop mining activity in the country.

Who is the governing body of the Peru mining industry?

The Peruvian mining industry is governed and regulated by different authorities, which focus on several aspects such as administration, environment, and health and safety. Some of the chief agencies include the Ministry of Energy and Mines, Geological Mining and Metallurgical Institute, Ministry of Environment, the Supervisory Organization of Investment in Energy and Mining, the Organization of Supervision and Environmental Assessment, and National Superintendence of Labor Inspection (SUNAFIL).

Ministry of Energy and Mines (MINEM)

The General Directorate of Mining, the line unit of MINEM, reports directly to the Office of the Vice Minister of Mines, which is responsible for regulating and promoting mining activities, safeguarding the rational use of mining resources, and minimizing damage to the environment.

Geological Mining and Metallurgical Institute (INGEMMET)

It is a specialized public agency in the Energy and Mining sector. The institute obtains, stores, records, administers, and disseminates geo-scientific information related to subsoil resources, geological risks, and the geo-environment. It is also involved in receiving petitions, the granting of mining concessions, and their extinction based on the causes established by law and ordering and systematizing the geo-referenced information through the National Mining Cadaster.

Ministry of Environment (MINAM)

The Ministry is responsible for promoting the conservation and sustainable use of natural resources, along with the protection and improvement of environmental quality. It also formulates, directs, executes, supervises, and evaluates the National Environmental Policy, which is applicable to all levels of the government.

Supervisory Organization of Investment in Energy and Mining (OSINERGMIN)

It is a public institution, which is responsible for regulating and supervising investment in the Energy and Mining sector. It was established in 1996 via Law No. 26734, and began operations in October 1997, supervising electric and hydrocarbon companies. OSINERGMIN has legal status under internal public law and enjoys technical, administrative, economic, and financial autonomy.

Organization of Supervision and Environmental Assessment

The Organization of Supervision and Environmental Assessment (OEFA) is a specialized public technical body under the Ministry of Environment, which is responsible for promoting environmental regulations and the improvement of the National Environmental Management System, in order to safeguard the balance between investment in economic activities and environmental protection. Its direct functions include monitoring and imposing administrative sanctions to ensure compliance with the environmental obligations.

National Superintendence of Labor Inspection (SUNAFIL)

The SUNAFIL, part of the labor authority the Ministry of Labor and Employment Promotion, supervises compliance with the health and safety regulations applicable to mining activities.

For more insights on the Peru mining industry fiscal regime, download a free report sample

Market Report Scope

Key governing bodies Ministry of Energy and Mines, Geological Mining and Metallurgical Institute, Ministry of Environment, the Supervisory Organization of Investment in Energy and Mining, the Organization of Supervision and Environmental Assessment, and National Superintendence of Labor Inspection (SUNAFIL)

 Scope

The report outlines the governing bodies, governing laws, various mineral licenses, and fees by state and territory.

Reasons to Buy

  • Enhance your decision-making capability in a more rapid and time-sensitive manner.
  • Find out about Peru’s governing bodies and major laws in the industry.
  • Identify various mineral licenses and fees.
  • To gain an overview of Peru’s mining fiscal regime.

Table of Contents

1 Executive Summary

2 Country Overview

2.1 Macroeconomic Performance

2.2 Corruption Index

2.3 Minerals Overview

3 Fiscal regime

3.1 Classification of Mining Activities in Peru

3.2 Governing Bodies

– Ministry of Energy and Mines (MINEM)

– Geological Mining and Metallurgical Institute

– Ministry of Environment (MINAM)

– Supervisory Organization of Investment in Energy and Mining (OSINERGMIN)

– Organization of Supervision and Environmental Assessment

– National Superintendence of Labor Inspection (SUNAFIL)

3.3 Laws and Regulations

– General Mining Law

– Mining Canon Law

– Law Regulating Environmental Liabilities of Mining

– General Law of the Environment

– Mining Rights and Fees

– New Merger Control Regime

3.4 Taxes and Royalties

– Corporate Income Tax

– Capital Allowances

– Modified Mining Royalty (MMR)

– Special Mining Tax (SMT)

– Special Mining Burden (SMB)

– Value Added Tax (VAT)

– Withholding Taxes

– Tax Incentives

– Tax Treaties

4 Appendix

4.1 Abbreviations

4.2 Coverage

4.3 Secondary Research

List of Tables

Table 1: Classification of mining activities in Peru, 2022

Table 2: Mining rights

Table 3: Concession fees, 2022

Table 4: Maximum depreciation rates under general tax rule, 2022

List of Figures

Figure 1: Country overview, 2021

Figure 2: Nominal GDP ($ Billion) and real GDP growth rate (%), 2001–2021

Figure 3: Mining investment and exports, 2011–2021

Figure 4: Corruption perception index rank, 2015–2021

Figure 5: CPI ranking, 2021

Figure 6: Mineral production trend, 2011–2021

Frequently Asked Questions

The Peru mining industry is governed by the Ministry of Energy and Mines, Geological Mining and Metallurgical Institute, Ministry of Environment, the Supervisory Organization of Investment in Energy and Mining, the Organization of Supervision and Environmental Assessment, and National Superintendence of Labor Inspection (SUNAFIL).

The key minerals mined in Peru are gold, silver, copper, lead, and zinc.

 

 

 

The major laws and regulations in the Peru mining industry are General Mining Law, Mining Canon Law, law regulating environmental liabilities of mining, and General Law of the Environment.

The taxes imposed on the Peru mining industry are Corporate Income Tax, Capital Allowances, Modified Mining Royalty (MMR), Special Mining Tax (SMT), Special Mining Burden (SMB), Value Added Tax (VAT), and Withholding Taxes.

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