Peru mining experts warn of refining dependency and tax changes

Mining industry leaders in Peru are highlighting challenges regarding mineral processing and taxation. Juan Carlos Ortiz, president of the Instituto de Ingenieros de Minas del Perú (IIMP), noted that while Peru and Chile jointly produce approximately 8 million metric tons of copper annually, only 20% is refined locally. The remaining 80% is exported as concentrate, much of which is sent to China for transformation. Ortiz warned that heavy reliance on a single market for refining could weaken the negotiating power of producing nations. He attributed the lack of local refining capacity to lower profitability, noting that mining projects often see returns of 15% to 20%, whereas refineries typically yield only 4% to 5%.

Separately, Roberto Maldonado, vice president of the IIMP, addressed proposed changes to mining royalties and the Special Mining Tax in Peru. Maldonado urged that any modifications to the tax regime undergo comprehensive technical analysis to assess their impact on national competitiveness and long-term investment attraction. He emphasized that tax stability is crucial for legal certainty, cautioning that prioritizing short-term fiscal revenue could undermine future economic growth, employment, and state resources.