The new Environmental Regulation for Mining Exploration will be ready by the end of the month, announced Mining Vice Minister Ricardo Labó, who noted that it is not only a modification of the former regulation. It was during his presentation in a breakfast organized by the Australia-Peru Chamber of Commerce (APCCI) last 18th of April.
Said regulation, alongside the modification of the “Sales Tax in Advance” and the regulation of the “Social in Advance Fund” are two norms that have a direct impact on mining exploration activity, one of the three pillars of the energy and mines sector’s current strategy.
These are only a few steps taken towards the goal of securing 8% of the mining exploration global spending (currently, Peru receives 6%), one of the four goals proposed by the Ministry of Energy and Mines (MEM) for 2021, year of the Peru’s Independence Bicentenary and the last one of the current government.
“The new regulation allows the updating of procedures, meeting of deadlines, greater articulation between the formalization entities and, above all, allow the legislation to match the reality of exploration activities. For example, the new regulation allows the platforms to move within a defined area, previously, you needed to present a modification for moving it a centimeter, this did not match reality”, the VMM said.
The senior official announced during the PDAC Convention – held last March in Toronto – that his four strategic goals are: promote new explorations; make projects in portfolio feasible; guarantee the continuity of operations and implement a new mining formalization strategy.
In addition to the 2021 exploration target, other targets are, to make US$14 billion worth of projects, feasible – though the portfolio is of US$37 billion -; increase copper production in 30% and formalize 15,000 informal miners.
Regarding the tax return during exploration, regulation that exists since 2003, he mentioned delays in its application, not due to normative issues, but human resources issues. “We are strengthening the team in charge of reviewing the tax return claims within the ministry of energy and mines and we are improving the process to be much more efficient, from the signing of contracts to the process of tax return”.
Also, within two weeks or so, the Regulation for the Social in Advance Fund, should be ready. This is one of the key regulations of the current government, which law decree was approved early this year. Although “it has been approved by the Congress of the Republic with some changes that limit its application, it will still operate. This is so that government intervention helps create an adequate social contest and decrease some expectation of the people”, he said.
The Social in Advance Fund is destined to areas where advance exploration takes place with culminated feasibility studies and not in areas where the mining “canon” is active already.
On the other hand, Labó said that he hopes for this week, the publication of the Modification to the Regulation of Safety and Mining Health, where among other issues, the minimum hours for the required training will be honored; or that the approval of the mining plan corresponds to the Operations Management and not to the Safety Committee, for example.
Likewise, they are reviewing the procedure for the “Previous Consultation”, in which the goal is to have a protocol where the State has the characterization of areas where mining activity will be developed before companies claim it. “There is a lot of fear when we talk about previous consultation, however, although some parameters have been determined, the conducted previous consultations to date have been positive, no project has had to stop, but we believe that the State must not be reactive”, he said.
He also mentioned the new mining formalization process – the new law was approved early this year and the regulation is on its way – and environmental liabilities. Regarding the last one, he said that they are working on identifying the liabilities that can be reused, despite, however, that the current norm does not force their closing. Another element is that there are many institutions and actions around these, which generate disorder and centralization is needed. “We expect that before mid-2017, we have a clear strategy of how we are going to tackle this issue”, Labo said.
Finally, the VMM mentioned that he is coordinating almost daily with Javier Fernández-Concha, the new Viceminister of Land Government of the Presidency of the Council of Ministers, which will enable a more coordinated work with regional and local government so the State has more presence in the lands with a new system of social conflicts management.
PERU AND AUSTRALIA WILL NEGOTIATE A FTA
Peru and Australia are about to begin negotiations towards a Free Trade Agreement, after the Trans-Pacific Partnership Treaty (TPP) was suspended due to USA disinterest after Donald Trump took the Presidency.
“In the coming months, we are going to see a successful negotiation between Peru and Australia and that is going to help a lot in the mining sector”, said Nicholas McCaffrey, Australian Ambassador in Peru, during the Breakfast organized by APCCI.
Thus, Australia is directing its international policy to the strengthening of its relations with countries and traditional and non-traditional partners, “that see the world the same way that we do, that is, the importance of having global institutions with regulations and the importance of free trade […] and Peru is one of them”, he said.
He added that his job is to attract more investment from Australia, but this is difficult due to the great competition with Asian countries, especially China.
Australian policy is an answer to the “international instability, we’ve all seen the painful images from Syria, the situation with the two Koreas, the people’s decision in England on Brexit; the soon-to-be elections in France that could give us a surprise result; and also with the election of Mr. Donald Trump in the United States”.