June 15 (Bloomberg) -- Chile's Mining Minister Laurence Golborne urged Congress to approve today proposed changes in mining royalty laws after some senators rejected the motion.
Opposition senators on the finance committee of congress rejected a clause in the bill yesterday that would leave taxes unchanged for mining companies between 2013 and 2020, according to the Senate website.
The government of President Sebastian Pinera, which took office in March, is seeking to introduce an optional sliding tax rate on profit of between 4 percent and 9 percent. The new rate, which would provide $700 million in additional revenue next year and in 2012, will help the government pay for damages caused by a Feb. 27 earthquake that damaged central and southern Chile.
The bill "is very convenient for the country because it doesn't hurt investment and it allows the government to cash in when economic cycles are benefiting miners," Golborne told reporters in Santiago today.
The tax increase will provide enough additional revenue in the next two years to build 50,000 houses for residents who became homeless during the earthquake, Golborne said.
Mining companies will likely reject the tax increase if the clause that extends existing terms for miners between 2013 and 2020 is removed, he said. The new rate would be reinstated in 2020, according to proposed legislation.
Chile was struck by an 8.8-magnitude earthquake in February, the fifth-largest recorded in the world in the last century.