Lawmakers in Chile’s lower house of Congress approved a mining tax reform bill, which will require large copper and lithium miners that operate in the mineral-rich country to pay more taxes and royalties to the government, reported Reuters.
Under the reform, the top tax rate will reach up to nearly 47% for companies that produce over 80,000 tonnes of fine copper a year. It also establishes a 1% ad valorem tax on copper sales from companies that sell more than 50,000 tonnes of fine copper, as well as an additional 8-26% tax depending on the miner’s operating margin.
“With this legislation, we seek to avoid what happened many times with our country’s natural riches: they were exploited, they disappeared, which left very little for the country and its future development,” Finance Minister Mario Marcel told reporters after the vote.
Mining association Sonami described the final legislative language as “better” than what was initially proposed by the government, giving credit to Marcel for enacting industry-friendly revisions. The bill had initially proposed a ceiling of 50%, but this was brought down repeatedly amid legislative debate and criticism from the mining industry.
The bill now heads to the desk of President Gabriel Boric, who has publicly backed the legislation, for his signature.
Reuters noted that Chile is the world’s top copper producer and the second largest producer of lithium.