Polo: Royalties would harm competitiveness

Peru's deputy mining minister Cesar Polo roundly rejected the introduction of mining royalties in a presentation at a public meeting on the issue held in the country's Congress. The country would no longer be competitive in attracting mining investment if a 3% mining royalty were introduced, said Polo, adding that a study by consultant James Otto of the Colorado School of Mines in the US clearly supported this thesis. Polo also opposed the introduction of a 2.5% royalty, balanced by reducing import tariffs to zero, arguing that changing the rules of the game would create instability. Instead, Polo said there were other ways of achieving greater contributions from mining companies such as a proposal, currently being developed by the ministry of energy and mines (MEM), requiring miners to form a social commitment to the areas where they operate. The idea, initially announced by mining minister Hans Flury earlier in the week, envisages companies contributing to the sustainable development of the region beyond the lifespan of their mining activities. Companies would commit themselves to environmental excellence, strong relations with local institutions and individuals and preferring local labor and goods and services, among other elements.