Chile Govt Might Resubmit Copper Royalty Changes To Congress

SANTIAGO, Jul 30, 2010 (Dow Jones Commodities News via Comtex) -- Chile's government is considering resubmitting a bill to increase copper miners' royalties to the country's congress, Finance Minister Felipe Larrain said Friday.

Earlier this month, Chile's congress rejected the proposed increases to the royalty that copper miners already pay.

The changes in the royalty would have contributed about $700 million to the $8.4 billion the government needs for public-sector reconstruction in the wake of a massive February earthquake.

An 8.8-magnitude earthquake rocked south-central Chile on Feb. 27, killing hundreds and causing an estimated $30 billion in damages.

"It's a topic that we are analyzing, and that we will take a stand on soon," Larrain told reporters at a press conference.

He added that he and President Sebastian Pinera had been discussing the matter.

The rejected proposal had a variable tax rate of 9% for 2010 and 2011, which would have depended on the mining company's sales margins and on copper prices. During 2012 and 2017, the tax rate would have been fixed at 4%.

The current law, which is in effect until 2017, requires large-scale miners to pay a royalty of 4% on their copper sales.

Chile is one of the world's premier copper producers, as it accounts for over a third of global copper production.