June 7, 2011 / 8:03 PM / 7 years ago

UPDATE 1-N. American miners keen to engage with Peru's Humala

* Miners say keen to engage with new Humala government

* Companies say they are committed to staying in Peru

* Humala may seek more control over natural resources

* President-elect may enact windfall profits tax

* Mining shares have fluctuated since election (Adds comments from Rio Alto, Minera IRL executives)

TORONTO, June 7 (Reuters) - North American miners with assets in Peru on Tuesday urged leftist President-elect Ollanta Humala to consult with them before pushing ahead with reforms but said they were committed to their operations there.

Peruvian markets, as well as shares of miners operating in the South American country, have see-sawed in the two sessions after the leftist leader’s victory in a run-off election against his right-wing rival Keiko Fujimori. [ID:nN06237167]

While Humala has backed-down on a proposal to raise the corporate income tax rate on miners by 50 percent, investors still fear he may tighten government control over the natural resources sector and levy a windfall gains tax on miners.

Freeport-McMoRan (FCX.N) and Newmont Mining (NEM.N) said they intend to stay the course in Peru. Freeport owns the Cerro Verde copper and molybdenum mine, while Newmont owns the Minera Yanacocha gold mine in Peru and the Minas Congas project.

“We have conducted successful operations in Peru for an extended period and are positive about the long-term future for Cerro Verde. We will be monitoring fiscal policy affecting mining companies in the country and are progressing studies on the expansion of Cerro Verde,” said Freeport spokesman Eric Kinneberg.

Newmont spokesman Omar Jabara said the company has operated in Peru since the early 1990s and was committed for the long haul.

Earlier on Tuesday, Southern Copper said it was reviewing $2 billion in planned projects in Peru, but diversified miner Xstrata XTA.L and precious metals miner Buenaventura (BVN.N) stood by their plans to invest in the Andean nation. [ID:nN07145745] [ID:nN07134946] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For main story on Peruvian Miners [ID:nN07148991] Full campaign coverage [ID:nVOTE2PE] Key political risks to watch in Peru [ID:nRISKPE] FACTBOX-Who’s who on Humala’s economic team [ID:nN06300486] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^


Canadian juniors with mining operations in Peru urged the country’s president-elect to engage with the mining industry before making changes to mining laws and taxes.

Shares of Vancouver-based Bear Creek Mining, hit hard by anti-mining protests ahead of the election, have tumbled more than 30 percent since early May and almost 45 percent since the beginning of the year. [ID:nN01147181]

Despite the pullback, Chief Executive Andrew Swarthout said the company, which owns some major silver development projects in Peru, is looking ahead to talks with the new government.

“We want to make sure that the message gets out that we’re willing to have discussions about royalties and taxes,” he said, noting that he supports Humala’s efforts to resolve structural problems over the distribution of wealth.

“I’m happy to be the one that catalyzes this discussion because it needs to be made,” Swarthout said. “But we expect that the rights of foreign investors and private ownership will continue to be respected.”

Peru is also home to juniors such as Rio Alto (RIO.V) and Minera IRL (IRL.LM) whose shares have also been buffeted in recent weeks by the pre-election political climate.

“The mining community is used to investing in places like the DRC, Mongolia, Zambia and places like that where things have been a bit chaotic in the past,” said Rio Alto President Alex Black. “In Peru all we want to see is some direction, hopefully Humala will come out with that.”

Minera Chairman Courtney Chamberlain said he is cautiously optimistic about any changes to the tax regime. He believes the government will move cautiously rather than make any precipitous moves that chase investment away.

“I expect there will be some changes, but they will be considered changes taking into account the effect on investment appeal of Peru,” he said. (Reporting by Euan Rocha and Julie Gordon in Toronto, Steve James in New York; Editing by Frank McGurty)

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