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Ancash: Increase in mining profits, but what will fall Mining transfers Canon 2010? REGARDING

By Richard Moreno Bustos

projections third-class taxes to state, particular from the extractive industries has been the subject of various comments from experts, especially when data published from the year-end SUNAT shows that income from mining group showed a slightly larger drop of 50% from 2008 and therefore would reduce mining royalties.

But No. The figures show the financial statements of the CONASEV (for Barrick Mishquichilca) and Xstrata (for the case of Antamina) indicate that compared to 2008 the two most important Ancash have increased their profits by 1% and 3% respectively. (1)

happens that companies in the country during the year, had a level of contribution SUNAT very cautious, as the International Crisis began in late 2008, generated considerable uncertainty for 2009. In the case of mining, in January 2009, were concerned about the behavior that would have the price of minerals, hence, to avoid reducing their profits, many companies opted to use cost-reduction strategies (non-renewal of contracts , reduced social spending, delaying expansion, etc..).

Then the income tax in the mining sector will increase, since it is expected an "extraordinary and significant adjustment" of their tax returns until April, which also occur in other sectors.

Estimating the level of utilities of the two most important department, Ancash should expect an increase in transfers of Canon Minero 27% higher over the previous year (2009), ie the Canon Minero for Ancash in 2010 would have to be S /. 1.083 million.

However, all is not said. Knowing the importance of Antamina in the generation of Canon Minero de Ancash (72%), the question arises: What proportion of their profits, Antamina expects to commit the outcome 2009 with the "Reinvestment of profits? Recall that Antamina will reinvest $ 900 million of profits for its expansion project and the state does not collect income tax, which will decrease by 135 million dollars for the Canon Minero Ancash.

La Compañia Minera Antamina has stated that such reinvestment break apart for several years, therefore, the answer to that question will tell us about such decrease of 1.083 million new soles of mining royalties that are estimated to , 2010, "normal."

(1) On the basis of Article de Avila, Gustavo - "2009 was not bad year for Mining" - Grupo Propuesta Ciudadana.