The Peruvian minister of economy, Pedro Francke, said the new left-wing government believes it could increase mining taxes without affecting the sector’s competitiveness, according to a media report by Reuters. Peru is home to Shougang Hierro Peru, the nation’s key iron ore producer.
The media report noted Peru depends on the mining sector to finance its public spending. The recently elected president Pedro Castillo is looking to improve the government’s spending on social programs and might to so by increasing taxes over the mining sector. The announcement caused concerns among investors, the media report said.
“As for any of these formulas, we will take into consideration that (they) … cannot put at risk neither the profitability nor the investments of companies,” the minister said.
Reuters labeled the minister as a moderate left-wing politician. Brazil, which is home to mining company and iron ore producer Vale, is also discussing a bill to increase the mining tax, known as CFEM, which could increase from 4 to 5.5 percent.