IKN

Part of IKN698 last weekend, we’re finally seeing signs of adults in the room in Peru’s government as regards mining. Not the President, PM or Mining Minister however, as the star of last week’s show at the Perumin conference was the country’s recently appointed FinMin, Kurt Burneo. Here’s the paste-out:

Peru plays nice with its mining industry

It was all smiles and touchy-feely happy smiley government people at Peru’s big biannual mining event, Perumin in Arequipa last week. Though President Pedro Castillo didn’t attend the four day event (wise call) and his Prime Minister gave one of the keynote speeches (and was booed around the conference grounds by several hecklers on his way in and out), the star of the show was new FinMin Kurt Burneo, who told the mining community what they wanted to hear (31):

“Read my lips, no new taxes.”

That one always goes down well with a group of millionaire business leaders. He made headlines when announcing the rollback of the previous Castillo government plans to increase State burdens on mining and told the conference (there’s no reason to disbelieve) that the royalty and/or windfall tax proposals are now shelved and the industry would not be taxed any further by the current government. This got full approval from his audience and once Burneo had their attention, he went on to propose a three point plan to improve the prospects of Peru’s mining sector he calls “Plan Impulse Peru”, starting his pitch to the company bosses with (translated), “The Peruvian mining sector is highly competitive, but could be even better via better coordination between the public and private sectors. Our objective is to boost and advance mining projects at their different stages of development.” Aside the promise of no further State burdens, his three point plan includes:

1. Optimization of regulatory procedures, as well as assigning bigger budgets to key public sector offices connected to environmental protection and water services. This would allow permits for exploration and eventual operation to be expedited more quickly and solve one of the main complaints in the Peruvian mining scene at present, that of excess “permitology” (a local expression).
2. Incentives to mining investment and the freeing up of investment paperwork, including a proposal for VAT tax returns on exploration work done.
3. Improved social coverage that would help the public and private sectors work together to solve community issues. This would also entail mining companies contributing to local funds to improve the lot of communities, but this would likely come from the reassignment of payments already made by companies to the State, rather than a new charge.

The government’s novel touchy-feely lovefest toward the mining industry continued with the speech given by Prime Minister Ánibal Torres, who thankfully for the rest of us managed to get through a public presentation without referencing Adolf Hitler and the way that German leader did wonders for his country’s economy (8). Instead and during the keynote closure speech for Perumin, he exhorted mining companies to continue to invest in the country and guaranteed a stable and welcoming macro under the leadership of Pedro Castillo, as long as they kept their side of the bargain and were good corporate citizens toward local communities and the environment. In his words (translated), “(Investors) can have complete confidence that their investments in Peru are safe.”

That’s nice. Torres used his speech to announce that his government would soon take measures to improve the current permitting track and simplify the paperwork required, particularly for the exploration stages of any project or eventual operation. Also fine, but FinMin Burneo was someone they trusted and had already won them over. And that was Perumin.