Peru has a long history of mining which predates the Spanish conquistadors. An ancient iron ore mine recently discovered in Peru reveals civilizations in the Andes mined the valuable rock even before the Inca Empire. In 2009 investment in Peru's mining and energy sectors totalled 4.9 billion dollars. Mining exports are crucial for Peru, with the 2009 total of 16 billion dollars comprising about 60 per cent of the country's total export value last year.
Government Protection
Agreements have been signed by the government of Peru with affiliates of the World Bank and with the Overseas Private Investment Corporation to insure foreign investors against such non-commercial risks as expropriation and abrogation of contracts. Peru has signed the Agreement for the Constitution of the Multinational Investment Guarantee Agency, a World Bank agency, and The Agreement for Investment Insurance with the United States Overseas Private Investment Corporation ("OPIC") and the World Bank Convention on the Settlement of Investment Disputes.
Mining Legislation
The main legislation governing the mining sector is the General Mining Law of Peru (1991). Investment promotion laws, the Peruvian tax regime and environmental framework are other components of the Peruvian mining landscape. Concessions are granted for exploration, exploitation, beneficiation, auxiliary services and transportation.
A mining concession grants its holder the right to explore and exploit minerals within its area. Key characteristics include:
- Concessions are exclusive, freely transferable and mortgageable
- Location is based on a UTM grid system of minimum 100ha to 1000ha
- Granted on a first-come, first served basis
- Indefinite term but with restrictions and an objective based criteria
- Single annual fee payable; fee structure based on scale of operations and duration of ownership
- Access to the property must be negotiated with surface land owners
