President-elect Ollanta Humala of Peru said that the county would respect the existing mining contracts. The price of mining stocks had plummeted on June 6, when the concerns over raising mining royalties and increased government control over natural resources were feared.
Trading was stopped on the Lima Exchange once the Lima General Index fell to its lowest since 1981. Companies such as Xstrata and Buenaventura have projects worth $8.7 billion riding on the new policies. There was serious need for reassurance to the mining companies operating in Peru.
Now it seems that in a remedial measure the chief economic advisor to Humala, Kurt Burneo gave an interview placing their position in the open. Mr Burneo said that they would respect accords with companies that have tax stability contracts. He added that there was an extraordinary situation with high prices, and the state has the legitimate right to charge taxes, not expect a handout.
Humala is a former army officer who beat Keiko Fujimori with a narrow margin on Sunday. He seems to have dropped his more radical reforms in favor of a progressive pattern. He said that mining companies whose profits have swollen on lofty global commodities prices should fund social programs in a country where a third of people are poor despite a decade-long economic boom.