Miners Warn Chile Royalty Bills Could Hamper Investment
- October 20, 2022
- Posted by: Quatro Strategies
- Category: Mining
Mining majors BHP and Antofagasta said on Wednesday Chile’s proposed mining royalty bill would affect competitiveness and discourage miners from further investments while reevaluating the current ones. Chile is the world’s biggest copper producer and its No.2 lithium producer. The government has proposed a royalty with a portion based on sales and the other subject to profitability, which progresses as the price of copper increases.
BHP said the current bill would impact its competitiveness abroad and negatively impact its operations in other countries.
“It is our duty to warn that in a highly competitive global world, Chile cannot disproportionately increase its taxes without significantly affecting investment levels,” BHP’s vice president of corporate affairs for the Americas, Muga said in his speech to Chilean Congress.
Muga also said that if the bill goes through, the company would have to reconsider its announced investment portfolio of $10 billion as it was outlined without considering “such a heavy tax burden”.
Antofagasta Minerals said that the proposed changes would put the taxation over 48%, on par with high tax countries such as Congo, Mongolia and Zambia.
Antofagasta had previously announced an investment portfolio close to $5 billion for the coming years.
Both company representatives acknowledged that there’s room for more contribution from the mining sector, but pushed for collaborative agreements that maintain business sustainability.
Other global mining giants like state-owned Codelco, Glencore, Anglo American and Freeport-McMoRan also operate in Chile.
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