Royalties bill will bankrupt Chile’s private miners, trade group says

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The bill, approved by the Chamber of Deputies and currently under consideration in the Senate, would impose a 3% royalty on copper sales that would rise sharply as prices rise.

Diego Hernández, president of the National Mining Society (Sonami) – a coordination group for the Chilean mining sector – said Wednesday during a presentation to senators that the envisaged rates “are disproportionately high … in practice, this would make exploitation private mining impossible ”.

Supporters of the bill say the proceeds of the proposed levy are urgently needed to subscribe to social programs

Hernandez said the bill was also regressive “because it affects the least competitive mines the most and ignores the heterogeneity of Chilean mines”.

Chile, the world’s largest producer of copper, has a wide range of copper mines of varying sizes, productivity and age, making it difficult to create a tax regime that does not unfairly disadvantage one over the other. ‘other.

Supporters of the bill, however, say the proceeds from the proposed levy are urgently needed to fund social programs for Chileans suffering from the coronavirus pandemic.

The administration of center-right president Sebastian Pinera has warned of the bill’s potential impacts on the economy and unemployment, and questioned its validity, saying it believes such legislation should come from the executive.

(By Fabian Cambero and Dave Sherwood; Editing by Sandra Maler)


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