Chile's lower house of parliament finally approved a long-awaited mining tax reform on Wednesday that now only needs to be signed by leftist President Boric, who has publicly supported the reform, to become law.
The reform would require large copper and lithium producers in Chile to pay the government more in taxes and royalties.
Chile is the world's largest producer of copper and the second largest producer of lithium. Both copper and lithium are seen as key raw materials for future electric vehicle manufacturing.
By a vote of 101-24, lawmakers approved changes to the tax and royalties bill passed by the Senate last week.
The one-sided vote was welcomed by Finance Minister Marcel, who stressed that the government's higher demands on mining companies would address past abuses.
Speaking to reporters after the vote, Marcel said, "By passing this legislation, we are trying to avoid what has happened so many times with our country's natural wealth: they are exploited, they disappear, and there is little left for the country and its future development."
According to this reform, the maximum tax rate for enterprises with an annual pure copper output of more than 80,000 mt will approach 47%, which is a very high tax rate in the industry.
It also imposes an ad valorem tax of 1 percent on companies with annual pure copper sales of more than 50,000 mt, and an additional tax of 8 percent to 26 percent depending on the miner's operating margin.
Mining association Sonami said the measure was a relief that it ended uncertainty about what reforms lawmakers would ultimately adopt.
"This uncertainty, which has persisted for almost five years, has undoubtedly damaged key domestic production activities," Sonami said in a statement.
