ECONOMY NATIONAL POLITICS

Senate approves mining royalty bill

Chile’s Senate approved the mining royalty bill. It is aimed at enabling non-mining areas to benefit from the country’s mineral wealth. The bill went back to the Lower House for final revision.

The Senate modified and approved the mining royalty bill, under which the government seeks to increase state income and redistribute mining wealth.

The bill went back to the Lower House for its third and final revision, and if the Senate’s modifications are accepted, it will be signed into law.   

A government press release said the royalty is necessary because mining corporations “extract scarce and non-renewable natural resources.” Funds collected through the royalty will go to different areas in the country.

Finance Minister Mario Marcel was quoted as saying by local media that minerals represent wealth for all of Chile, not just a mining region. If promulgated, the law will allow that “a rural area in Chiloé will be able to participate in the wealth of copper income [originating] in the north of the country.”

More about mining in Chile: 

Boric Administration approves ‘Los Bronces’ mining project

How does it work?

A maximum tax of 46.5 percent would be imposed on the taxable income of miners that produce over 80,000t/y of fine copper. Miners producing 50,000-80,000t/y will be taxed 45.5 percent at most.

In addition, an ad valorem tax of 1 percent will be levied on all companies producing more than 50,000t/y.

Lastly, three individual funds, worth US$450 million in total, will be created to distribute the revenue among regional authorities and mining municipalities. In this way, the law would decentralize mining tax revenues.

Mining Minister Marcela Hernando was quoted as saying that “we are committed to the decentralization of the country, and the path to development must be accompanied by territorial justice. That is precisely what this project aims at. In this way, mining contributes to the development of different territories.”

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