Peruvian government seeks to reach "new agreement" with mining companies

Ivan Merino, Peru's new energy and mining minister, said Peru, the world's second-largest copper producer, would provide incentives for "socially profitable" projects and seek a "new agreement" with the most important mining industry.

In his first interview since becoming minister on Thursday, Merino said mines need not only to make money for private companies, but also to generate taxes. and should help people by improving infrastructure, respecting indigenous communities and adopting better environmental protection.

Late on Friday, a day after taking office with other cabinet members appointed by left-wing President Pedro Castillo, Merino said a new agreement would be reached after talks with all participants in the industry, including large, small and medium-sized companies.

Castillo appointed moderate economist Pedro Frank as finance minister late Friday, a move seen as an olive branch to financial markets, as the left, which is likely to take a hard line, is now wavering. Earlier, Castillo appointed Guido Bailedo, a hardline Marxist, as prime minister.

Mr Castillo has promised to raise mining taxes to finance more investment in health and education, but Mr Merino said any new taxes would be determined on a company-by-company basis. "We can't generalize. You can't tell a company that the cost is already high, it will have higher taxes.

For the Las Bambas mine in MMG Ltd, local communities have blocked roads for more than a week, and the minister said the government is willing to "promote" dialogue.

Residents of three communities in Chumbivilcas province began the blockade on 23 July, claiming that MMG did not share enough of the benefits of the mine.

Merino believes that companies should invest, and if they meet Peruvian social profit standards, they will have the full support of the government.