As a result, the Mineral Processing Operations (INGEMMET) awards mining concession titles for medium and large-scale mining projects, and the Regional Directorate of Energy and Mines (DREM) grants them to Artisanal Miners (PPM) and Artisanal Miners (PMA). Peru is the world`s 2nd largest copper producer. Leftist President Pedro Castillo wants to raise taxes on mining companies to fund social programs, but has revealed few details since taking office in July. The title of a mining concession does not constitute a mining exploration or exploitation permit. It is necessary to obtain a prior set of eligible titles and administrative decisions, including, but not limited to, those mentioned below: Mining is one of the most important economic activities in Peru. On average, over the past three years, mining has accounted for nearly 10% of the country`s gross domestic product and 60% of exports. Dentons Peru focuses on the corporate side of mining, advising on mergers and acquisitions, acquisitions, listings on the Lima and Toronto stock exchanges, option underwriting, assignment of contractual position agreements and formation of joint ventures. To demonstrate the company`s cross-border capabilities, its clients are often based in Canada, such as Candente Copper Corp – whose partner Mario Chirinos is the regional director – Maverix Metals and Mich Resources. Fernando Pickmann leads the team and advises mining start-ups on fundraising and senior companies on acquisitions and sales. Chirinos, a specialist in mining, mergers and acquisitions and securities, joined the partnership in January 2022; He and Pickmann co-advised the acquisition of Peruvian Mines and Metals Trading by Canadian Oro X Mining Corp. and founded Ana Paula Saavedra Aranda, partner at Silver X Mining Corp. Rubio Leguía Normand is “very strong and diversified in the mining sector” and has “considerable experience in assisting international exploration companies navigate the legal system”; In fact, the team manages the entire life cycle of mining projects, from exploration to development and operations, with particular experience in permitting, environmental, financing and corporate matters. The group is led by a strong and experienced team consisting of mining specialist Xennia Forno, who brings over 40 years of experience and focuses on field planning and procurement.
Diego Grisolle, who deals with regulatory and trade issues relating to all extractive industries, and Emil Ruppert, less active in the news but just as experienced. Leading junior practitioners include Miguel Angel Soto, who was promoted to partner in December 2021 and is recommended for acquisitions and divestitures, as well as compliance and regulatory matters. Nancy Ogata, Senior Partner, also has extensive experience in international transactions in the industry. The mining concession requires the title holder to comply with two main obligations: the annual payment of the royalty in good standing and compliance with the minimum annual production or investment required. In addition, local governments levy taxes such as: (i) property tax: between 0.2% and 1% of the value of the property; ii) Land transfer tax: 3% of the purchase price or self-assessment value (whichever is greater) after deduction of 10 tax units (approximately $12,000.00); and (iii) local (municipal) contributions and charges for the provision of certain public services to taxpayers. Owners of mining activities are taxed with local taxes, which apply only in urban areas Finally, it is no less important to mention that according to Law No. 27343, “Law regulating stability agreements with the Peruvian State through special laws”, the legal stability regime for mining companies must take into account an additional income tax rate of two percentage points (2%). This means that for this specific tax (income tax) included in the Legal Stabilisation Agreement, two percentage points (2%) will be added to the rate to be stabilised. According to Peruvian legislators, this is a kind of “insurance” that mining investors must take out to benefit from this special stabilization regime. At Muñiz, Olaya, Meléndez, Castro, Ono & Herrera Abogados, Daniel Palomino advises mining companies such as Dynacor Gold Mines and Fresnillo on obtaining permits, property rights and exploration permits, and defends these rights against illegal mining activities.
The team provides regulatory advice on environmental, health and safety laws and represents clients in litigation – such as a recent tax dispute for Dynacor and an administrative penalty case for Fresnillo. Another area of experience is the due diligence of Peruvian mining projects for international clients such as Chinese insurance client SINOSURE and Emirati mining company Fura Gems. Tony Bustamante, a former in-house lawyer for Gold Fields La Cima and the Peruvian Environmental Protection Agency, has “in-depth knowledge of mining issues” and leads cases related to mining environmental sanctions proceedings. The mining concession is a different property, distinct from the land on which it is located. Because of this difference, two rights in rem may coincide in the same area, the ownership of which may belong to different persons – on the one hand, the right in rem to extract metallic or non-metallic mineral resources from the subsoil and, on the other hand, the right in rem on the surface. He added that he also wants to revise the law that regulates the use of mining royalties that go to the regional governments that host Peru`s mines. Alternatively, under the Peruvian Constitution, the participation of the Peruvian State in mining activities as a representative of interests is limited to a public interest, which must first be approved by a special law. The regulations on the safety of mining infrastructure and the development of basic safety conditions in factories are contained in the aforementioned regulations on occupational safety and health in mines, approved by Supreme Decree No. 024-2016-EM. Historically, Peru was and is a mining country.
It has the largest reserves of silver, lead and molybdenum in Latin America and is also the second largest in Latin America for copper, gold and zinc reserves. In addition, it is the second largest producer of copper and silver and ranks first in the production of gold, tin, lead and zinc in Latin America. Therefore, mining is one of the country`s main sources of income. In 2020, mining accounted for about 9% of the national GDP and about 62% of the total value of Peruvian exports.2 The Peruvian government has focused on improving the mining industry`s reputation as an activity that uses resources and the environment in a sustainable way, including conserving water resources, promoting agriculture, and good relations with stakeholders. Over the past decade, the mining industry has played an important role in the Peruvian economy, creating direct and indirect jobs and increasing economic activity (including through tax revenues), thus enabling the necessary and real social inclusion and the promotion of general well-being.