• This measure will give the authorities more certainty about the amounts they will manage in their budgets, which often decrease when metal prices fall.

One of the reforms proposed by the Ministry of Economy and Finance (MEF) to better utilize mining royalties, canon resources, and other sources from mining is the creation of the Canon Stabilization Fund (FOCAR), which will reduce volatility and provide greater predictability to the authorities regarding the resources they will receive in their investment budgets. This will facilitate better planning of project implementation.

The Deputy Minister of Economy, Juan Pichihua, said that this measure will help standardize the funds and prevent them from fluctuating based on global metal prices, as they do now.

According to the presentation made by the official at PERUMIN 36, regional and local governments will receive a stabilized transfer equal to 50% of the institutional opening budget (PIA). If the resources increase, there will be an exceptional transfer.

The MEF reported that in 2022, regional and local governments received an exceptional transfer of S/10 billion from mining royalties and fiscal redistribution, while in the current year, the amount has reached S/7 billion.

He also clarified that this fund would receive resources not only from mining, but also from the exploitation of other natural resources in the country.

In addition to this reform, the MEF proposed the creation of an entity responsible for developing technical specifications and pre-investment studies for municipalities that lack the capacity to do so. Another change aims to make mining canon effective for communities, which often get diluted through various percentages and divisions that can be confusing.