Tacna and Arequipa are the southern regions that received the most mining canon

The central government transferred this January, the first advance of mining canon corresponding to the year 2023 to regional and local governments throughout the country. According to the information published on the Economic Transparency page of the Ministry of Economy and Finance, in some cases the amounts are higher than those delivered in the first advance of the year 2022.

The regional governments of Tacna and Arequipa are the ones that have received the greatest economic resources (see infographic). In the 2022 canon sneak peek, the amounts were 61 million 898 thousand soles for Tacna and 28 million 249 thousand soles for Arequipa. The same does not happen with the Apurímac region, which in this first advance has received smaller transfers compared to 2022.

It should be noted that since 2020, the central government with Martín Vizcarra at the helm established the advance of the mining canon for January and the remaining percentage is completed in the middle of the year

Previously, all the resources from the mining canon were deposited in the month of July. So regional and local governments had less time to execute that budget.

Panorama

According to economist Glen Arce Larrea, in the year 2021 and beginning of 2022 the international copper price reached good levels. For this reason, in 2022, the mining canon that was transferred to the regions reached historic figures. For example, Arequipa, where the green hill miningas a whole (regional and local government) received 1,118 million soles, when in 2021 the transfer was S/ 215 million.

Arce notes that in the course of the past year, the price of the red metal decreased by more than 20%, with which it is estimated that the profits of the mining companies will not be as good as those of 2021. We will have to wait until July, when the final amount of the canon is completed.

Indeed, the Ministry of Energy and Minesin its November 2022 report, announced that the price of copper at the international level contracted in that month by 28%.

The economist said that in Arequipa, the new regional management headed by Rohel Sánchez, must prioritize the execution of the canon in road infrastructure works and the health sector. The first to generate jobs and the second to meet the urgent needs of citizens.

“Rich” municipalities

In the distribution of the mining canon, there are municipalities that receive a larger budget than the provincial municipalities themselves. In Arequipa, for example, the district commune of Cerro Colorado received this year more than S/ 30 million, while the provincial one barely S/ 1.7 million. Paucarpata has S/ 13 million, Yarabamba more than S/ 10 million. The situation of this last jurisdiction is particular, because despite receiving high resources, its inhabitants still do not have drinking water service, while urban expansion continues. For now they are supplied with cisterns that deposit the water in tanks.

In Cusco, the provincial municipalities of Espinar and La Convención are the ones that receive the most resources with S/ 54 million 540 thousand 274 and S/ 11 million 832 thousand. In the first case, due to the Glencore operation with its Tintaya and Antapaccay mines. In Espinar, the conflict also lurked last year, as the citizens demanded a bonus of 2,000 soles,

In the Tacna region, the district of Gregorio Albarracín Lanchipa has more than S/54 million in this first advance, much higher than that of the capital Tacna, where they received more than S/ 18 million.

In the case of Moquegua, the district municipality of San Antonio has S/ 36 million, 3 million more than the provincial municipality of Mariscal Nieto.

Waiting for the second deposit

With the second transfer to be made in July, The mining canon in 2023 will be equal to or greater than that registered last year when it reached a record figure of S/7,844.2 million. This “because in the first half of last year there have still been good mineral prices,” says Epifanio Baca, principal investigator of the Citizen Proposal Group.

In the opinion of the specialist, due to this bonanza, Regional and local governments, in order to make efficient use of these resources, should empower their management teams to carry out projects of higher quality and in a more planned way, designed based on a strategic plan.

“The poor quality of the projects and corruption reduce the impact of these projects in improving people’s living conditions,” he comments.

The specialist adds that although the mining canon is mainly intended to finance road projects and infrastructure for education, health, water and sanitation, and agricultural infrastructure, they should also prioritize projects of a productive nature.