At the beginning of the year, much was said about the good cycle of metal prices and how Peru, in a different context, without political uncertainty or social conflicts, could take advantage of that moment. The international panorama was favourable, but internally not entirely, with stoppages such as the Las Bambas and Cuajone mines.
Only in September, what was collected from Income Tax, mining royalties, special mining tax, among others, fell 33.6% compared to the same month of 2021 and totaled only S/713 million, according to data from the Ministry of Energy and Mines (Minem).
The main professor of Economics at the Universidad del Pacífico, Carlos Casas, explained that although the collection of the sector grew 77% in the first semester of the year compared to the same period of 2021, when comparing the months of July, August, September and October 2022 with the similar months of 2021, a 51% drop is observed.
“With this result you can see how volatile the sector is and how it is that in the first semester it grew strongly and in the second it is falling,” he said.
The conflict around mining activity, he explained, is one of the reasons for the figures in the red, assured Carlos Casas, and indicated that what is collected in the sector is almost 16% of the total collection in the country.
In this sense, he pointed out that it is important to boost the project portfolio, which, according to Minem, amounts to US$53.168 million as of September, in order to have more income.
“If we had more projects, now we would be compensating for the drop in prices with a higher volume of sales,” he stressed.
For the also former Vice Minister of Economy, the behavior of mining profits is “volatile” and has to do in large part with the international environment because there may be cycles of low prices, but, when good mineral prices come, “we are going to have a a lot of collection, which is what we must take advantage of to save ”.
Despite this scenario, there are factors that could bring more revenue, such as the Quellaveco copper project. This, according to the head of the Peruvian Institute of Economy (IPE), Víctor Fuentes, could increase tax revenues by S/1,600 million per year, while Cerro Verde could do so by S/2,800 million and Antamina by S/5,000 million.
Likewise, he indicated that the stoppage of projects has an impact on production mainly, but also on the collection of mining and activities related to this item.
“This affects the mining company and its suppliers, who end up paying less,” he said.
In the same way, he explained that what has been “hiding” the drop in mining production are the good prices of minerals.
“Social conflicts do affect the higher collection, but the high prices have somehow been hiding that situation,” he said.
KEEP IN MIND
- The accumulated collection so far this year in the mining sector amounts to S/14,259 million.
- The Sunat estimated that the tax collection this year would grow around 10.2%.
- Among the regions with the highest transfers from the canon, royalties and right of validity are Ancash, Arequipa and Ica.