Peru sets time limits on mining investment

Peru approved a bill that will set time limits for mining companies to invest in concessions

Peru`s government approved a bill that will set time limits for mining companies to invest in concessions, President Alan Garcia said.

The bill, approved on December 26 by Garcia`s ministerial Cabinet, seeks to set a five-year limit for companies to produce minerals before paying penalties per hectare of concessions, he told reporters at the Presidential Palace in Lima.

The government will strip companies of concessions seven years after that, he said. "Often decades, not just years, pass by without state concessions being used," Garcia said. "This bill brings an end to the bad custom of staking a lot of claims without investing any money to develop them."

Peru, the world`s third-largest copper and zinc producer and No 5 in gold, is counting on US$13 billion in mining investments to ensure annual economic growth of 7% in each of the next four years.

The government awarded 8,159 mining concessions, totaling 3.65 million hectares (9.02 million acres) in 2007, a 20% increase, as companies lured by surging metals prices staked the largest number of claims in more than a decade, according to the Mining & Metallurgical Geology Institute.

(Bloomberg, December 26)

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