Sep 1 2010
Chile is reforming the mining tax on the mining industry and as the world’s largest producer of copper it will be able to raise close to a billion dollars over the next three years if the new tax bill is passed.
The mining royalty bill is being sent to Congress after President Sebastian Pinera’s government revamped it. The bill is set at a minimum 4 % royalty but may go up to 9%.
The extra money generated by royalties paid by the mining companies is going to be used for reconstruction work which is needed after the massive earthquake that struck Chile in February. In fact 30% of the additional funds raised will go straight to these regions. The bill needed to be reworked as Senators from the opposition had rejected a similar bill last July.
The mining companies who pay the higher rate in 2011 and 2012 can look forward to an extension of their tax stability agreements beyond 2017. The royalties will be voluntary, but as a number of the contracts expire in 2017 the miners which are mostly foreign companies may see the advantage of being in favour with the government by paying the royalty.