Government insists on the Mining Royalty and Chilean Mining Chamber regrets – Energy Magazine

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The Royalty will be hybrid in nature, combining a component on sales between effective rates of between 1% and 2% for producers between 50,000 and 200,000 metric tons of fine copper (TMCF) and a component on mining income, with rates between 2% and 32% on operational profitability.

Santiago de Chile.- The Chilean Mining Chamber expressed its opposition to the Mining Royalty proposal, announced by the President of the Republic, Mr. Gabriel Boric, in the presentation of the Tax Reform of his government.

“As a union we have stated, we even exposed it in the Mining Commission of the Senate of the Republic, that the Mining Royalty is not viable for the development of national mining, on the contrary. For this reason, we proposed that the Specific Tax on Mining (IEM) be modified, with which we are sure the collection will be greater and without putting investment and the continuity of operations in the sector at risk”, said Miguel Zauschkevich Domeyko, President of the Mining Chamber of Chile.

It has been reported that the Royalty increases the taxation of large-scale copper mining, defined as those copper exploiters with production greater than 50,000 metric tons of fine copper per year. The Royalty will be of a hybrid nature, which will combine (a) a component on sales that will range between effective rates of between 1% and 2% for producers between 50,000 and 200,000 metric tons of fine copper (TMCF), and between 1% and 4% for those with more than 200,000 TMCF, and (b) a component on mining income, with rates between 2% and 32% on operating profitability, for copper prices between two and five dollars per pound. The rates will increase as the price of copper increases, so the tax will grow as economic income in the sector increases.

“We hope that this Royalty proposal will be evaluated in Congress and that the future of the country and of mining be considered. The demand for copper, lithium and other minerals that we have in the country will increase due to technological developments, such as electromobility, clean energy and everything that allows us to combat climate change. This reform will restrict the intention of investment and development of the sector”, asserted Zauschkevich.

Regarding the destination of the collection of this Royalty, which was announced would go to the regions, the President of the Mining Chamber of Chile indicated that similar initiatives were not carried out. “You have to remember that the first tax that was applied, badly called Royalty, would also be allocated to the mining regions, however, that did not happen. Therefore, if this prospers, a law must be enacted that obliges the State to invest the collection of the royalty in the development of the mining regions, in order to prevent this income from being diverted to the general treasury coffers”, emphasized Zauschkevich.

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