BHP Billiton’s copper mine in Chile, Escondida has agreed to the new mining royalty plan of the government. Andrew Mackenzie the head of the non ferrous mining division of BHP Billiton said that the world’s biggest copper mine had agreed to the royalty program which is at present optional.
By adopting the new tax structure Escondida copper mine would increase by about 2 to 4% the average income tax that it pays right now. The actual amount would fluctuate based on the international price for copper. It is the first mine in Chile to switch to the new royalty program which will come into implementation by January 17, 2011.
Company spokesperson for Escondida said that additional information about the decision would be released soon. It is believed that Andrew Mackenzie and Peter Beaven who is the head of the base metals division of BHP Billiton both met with the President Sebastian Pinera prior to the decision being made.
As per the new tax structure the government will get a sliding scale of between 4 to 9% linked to profits through 2012. This would be a considerable increase compared to the current 4 to 5 % that companies pay. The fixed rate of 4 to 5 % would be back from 2013 all the way to 2017. Then it would move from 5 to 14 % by 2023.