President Ollanta Humala signed Peru's new mining law on Wednesday, which will raise about $1 billion a year. The money is to be directed to the poorest parts of the country and help build schools and infrastructure.
Mining companies will now pay taxes based on their operating profits, ranging from 1% to 12%, rather than old regime where they paid 1% to 3% based on sales.
There will also be a windfall profits tax ranging from 2% to 8.4% of a company's net profits.
President Ollanta Humala, who was sworn into office in July, ran a center-left campaign promising to increase social spending while maintaining foreign investment.
Mining accounts for 15% of Peru's GDP. About 30% of the country's population is considered to be poor and the 10% lives in extreme poverty.
Image by Congreso de la Republica del Perú