UPDATE 3-Chile Gov't Sees Approval of Mining Tax Bill-Shanghai Metals Market

Hot Keywords

  • Inventory data
  • Air pollution
  • Macroeconomics
  • Production data
  • Zinc
  • Futures movement
  • Aluminium
  • Nickel
  • Copper
  • In the United States
  • nickel laterite
  • Morning comments
  • Nickel ore
  • NPI
  • Market commentary

UPDATE 3-Chile Gov't Sees Approval of Mining Tax Bill

Industry News 05:10:08PM Oct 08, 2010 Source:SMM

SANTIAGO, Oct 6 (Reuters) - Chile's government has reached an agreement with opposition lawmakers on a divisive bill that would hike taxes on miners operating in the world's top copper producer, Mining Minister Laurence Golborne said on Wednesday.

The compromise would reduce the period of fixed tax rates to six years and increase the range of applicable rates as high as 14 percent for companies covered under the new royalty scheme.

Mining companies currently pay a royalty between 4 and 5 percent. The new bill initially sets the royalty at 4 to 9 percent on mining sales on a sliding scale. It raises the royalty to 5 to 14 percent starting in 2018.

The Senate is due to vote on the bill on Tuesday.

With the royalty change, the government aims to raise $1 billion over the next three years for reconstruction after a massive February earthquake.

The announced agreement increases the odds of the bill passing Chile's senate after the legislation was rejected in July in a major political defeat for President Sebastian Pinera.

"There is a political agreement. It's a done deal," said Ignacio Walker, a senator who heads the opposition Christian Democrat party.

"This (agreement) gives investors the stability they seek."

The new royalty cannot be forced on companies currently covered under a 12-year tax invariability clause signed in 2005, though the government hopes many major miners will adopt the new scheme.

Chile's mining sector includes private multinationals BHP Billiton (BHP.AX) (BLT.L), Anglo American (AAL.L) and Xstrata (XTA.L) in addition to state copper giant Codelco [CODEL.UL].

Analysts say a rise in Pinera's approval rating for his handling of a rescue bid to save 33 miners trapped deep inside a mine in far northern Chile could help the bill's passage. 





 

UPDATE 3-Chile Gov't Sees Approval of Mining Tax Bill

Industry News 05:10:08PM Oct 08, 2010 Source:SMM

SANTIAGO, Oct 6 (Reuters) - Chile's government has reached an agreement with opposition lawmakers on a divisive bill that would hike taxes on miners operating in the world's top copper producer, Mining Minister Laurence Golborne said on Wednesday.

The compromise would reduce the period of fixed tax rates to six years and increase the range of applicable rates as high as 14 percent for companies covered under the new royalty scheme.

Mining companies currently pay a royalty between 4 and 5 percent. The new bill initially sets the royalty at 4 to 9 percent on mining sales on a sliding scale. It raises the royalty to 5 to 14 percent starting in 2018.

The Senate is due to vote on the bill on Tuesday.

With the royalty change, the government aims to raise $1 billion over the next three years for reconstruction after a massive February earthquake.

The announced agreement increases the odds of the bill passing Chile's senate after the legislation was rejected in July in a major political defeat for President Sebastian Pinera.

"There is a political agreement. It's a done deal," said Ignacio Walker, a senator who heads the opposition Christian Democrat party.

"This (agreement) gives investors the stability they seek."

The new royalty cannot be forced on companies currently covered under a 12-year tax invariability clause signed in 2005, though the government hopes many major miners will adopt the new scheme.

Chile's mining sector includes private multinationals BHP Billiton (BHP.AX) (BLT.L), Anglo American (AAL.L) and Xstrata (XTA.L) in addition to state copper giant Codelco [CODEL.UL].

Analysts say a rise in Pinera's approval rating for his handling of a rescue bid to save 33 miners trapped deep inside a mine in far northern Chile could help the bill's passage.