Peru's Mining Society, Economists, Praise Deal For New Tax

[Judi Lynn]

Source: Wall Street Journal

AUGUST 25, 2011, 5:55 P.M. ET.
Peru's Mining Society, Economists, Praise Deal For New Tax

By ROBERT KOZAK And RYAN DUBE

LIMA—Peru's largest resource sector industry group, the National Society for Mining, Petroleum and Energy, on Thursday praised the deal that will allow the government to place a new windfall tax that could raise about three billion soles ($1.1 billion) a year.

Prime Minister Salomon Lerner Ghitis said Thursday in an address in Congress that the new tax, worked out in talks with the mining sector, could add some 15 billion soles to the public coffers over the next five years.

"The mining companies have been working with the Peruvian state to reduce the levels of poverty in the nation and proof of this is the ratification of this obligation which took place taking into account technical issues," Mining Society President Pedro Martinez said in a statement.

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Mining sector analysts say the deal removes a cloud of doubt over the policies of the new government of left-leaning nationalist Ollanta Humala. During the election campaign this year, Humala promised to place a windfall tax in the mining sector, but it was unclear if the government would be able to reach a friendly agreement with the mining companies.

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