Announcing the arrangement at the Asia-Pacific Economic Cooperation in Sydney yesterday, Industry and Resources Minister Ian Macfarlane said the new deal signalled an unprecedented level of collaboration between the two countries.

“Both Australia and Peru recognise cooperation between our countries will boost trade and investment, particularly in the mining and energy sectors,” he said.

“This agreement will reap economic benefits for both economies and reduce the environmental impact of further mining and energy-related activities.”

Macfarlane and Prime Minister John Howard signed the agreement with Peru's President, Alan Garcia and Minister for Foreign Affairs, José Antonio García Belaúnde.