Chilean Finance Minister: Tax Reform Talks to Resume After Election

A large number of copper producers, traders and bankers around the world just recently gathered in Santiago, Chile for the World Copper Conference. They discussed the status quo, supply, royalties and future development trends of the copper industry. Recently, the Chilean government said that it will resume negotiations on tax reform after the election, and they will also discuss other bills related to mining royalties. Citing mining news, Chilean Finance Minister Mario Marcel said a few days ago that after the election of the Constitutional Council last Sunday, the Chilean government plans to resume key reform negotiations with local political parties. "Some political groups have asked us to wait until after the elections to resume negotiations and reach a financial agreement," Marcel told a televised news conference. Chile's government under President Gabriel Boric is seeking to revive its tax overhaul proposal after preliminary legislation for it was rejected by Congress in March. Other bills on minimum wages and mining royalties will also be discussed, Marcel said.

“We respect the dialogue with the authorities, but the proposed level of royalties would put Chile in a less competitive position compared to other jurisdictions where BHP operates,” said Rag Udd, BHP’s head of the Americas. Antofagasta CEO Ivan Arriagada said the latest changes raised the total tax burden to as much as 48 percent, compared with 41 percent for rivals such as Australia and Peru. Hopefully the next (legislative) phase will have the opportunity to continue working together. Chile's Mining Minister Marcela Hernando said last month the government was confident it could iron out differences with miners ahead of this week's congressional vote on the royalty bill. It is reported that Chile is the world's largest copper producer, and the Chilean Congress was discussing a new mining concession, which caused strong opposition from the industry. The government has moderated the proposal, which now has a total tax burden of about 48%. The company is also "very open" to discussions with partner Rio Tinto about expanding its Escondida copper mine, the world's largest, Udd said. BHP has pledged to supply more copper, including its stake in the controversial Resolution copper mine project in Arizona. The project has faced opposition from the Native American community. "We are committed to working with Rio Tinto and communities in the region, noting that this project could provide 25 percent of US copper needs over the next 60 years.