Law 28.258 on Mining Royalties, as amended

In 2004, Peru adopted Law 28.258 to regulate mining royalties. In the same year, this law was amended by Law 28323.

According to this regulation, a mining royalty is a payment made by the mining licensee to the State as an economic compensation for the exploitation of mineral resources. 

Article 8 of the updated version of law 28.258 requires the State to distribute the funds collected from mining royalties according to the following geographical divisions:

1. 20% to the district/s where the natural resource is exploited, with a further requirement that 50% of this distribution has to be invested in the specific communities where the natural resource is exploited;
2. 20% to the province or provinces where the natural resource is being exploited;
3. 40% to the district and provincial municipalities of the Region department or departments where the natural resource is in exploitation;
4. 15% to the regional government(s) where the natural resource is being exploited; and
5. 5% to the national universities from the region where the natural resource is exploited.

Further, article 9 provides: “The resources that the Regional Governments and Municipalities receive as mining royalties’ payment will be used exclusively to fund or co-fund investment projects that link mining to the economic development of each region ensuring the sustainable development of urban and rural areas. The resources that the national universities receive because of royalties will be destined exclusively to invest in scientific and technological research.”

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