Speaking in Arequipa (pictured) at Peru's premier mining conference industry executives said on Friday a drive by Peru's leftist president to raise mining royalties should not derail multibillion-dollar investments, but added that the viability of smaller, less efficient operations will be affected.
Peru's Buenaventura and US-based Newmont said their $4.8 billion Conga mine, the most expensive mine in Peru's history, was on track to come on line in 2014 while others including Barrick Gold, Xstrata, Anglo American and Gold Fields reiterated their commitment to the country.
Reuters quotes Juan Luis Kruger, general manager of South American operations for Gold Fields: "The industry is almost at a point in which it may no longer be competitive."
IB Times reports the government proposal envisions royalties of between 1% and 12% on the profits of those mining companies that did not sign stability agreements in the 1990s and if the bill is approved, they will also have to pay a "special tax" of 2% to 8.4%0 on profits.
MINING.com reported earlier in September Mexico has overtaken Peru as the world's top silver producer as output in the Andean nation has seen a sharp decline during the first six months of 2011. In the January-to-June period, Mexico turned out 1.88 million kilograms (60.4 million ounces), compared to 1.63 million kilograms in Peru, according to government figures.
Image is of El Misti a dormant volcano 5,822 m above sea level located in southern Peru near Arequipa.