SANTIAGO, Oct 19 (Reuters) – Mining giants BHP and Antofagasta Minerals said on Wednesday that a mining royalty
bill in Chile would affect competitiveness and encourage miners
to reevaluate investments.
Chile is the world’s top copper producing nation and the
government has proposed a royalty with a portion based on sales
and the other subject to profitability, which progresses as the
price of copper increases.
Speaking to Chile’s Congress, BHP’s vice president of
corporate affairs for the Americas, Rene Muga, said the current
bill would impact the company’s competitiveness abroad and
negatively impact its own operations in other countries.
“It is our duty to warn that in a highly competitive global
world, Chile cannot disproportionately increase its taxes
without significantly affecting investment levels,” Muga said.
He added that the initiative would lead the mining company
to reconsider an announced investment portfolio of $10 billion,
since it was designed “without considering such an excessive tax
burden increase.”
For his part, the vice president of corporate affairs of
Antofagasta Minerals , Rene Aguilar, pointed out that
with the proposed changes, total taxation would exceed 48%,
putting it on par with high-tax countries such as Congo,
Mongolia and Zambia.
“It is essential to consider the depreciation of investments
in the calculation of mining income,” Aguilar said. “This is a
very relevant point, especially for groups like Antofagasta,
which has a potential investment portfolio of close to $5
billion for the coming years.”
Both company representatives acknowledged that there’s room
for more contribution from the mining sector, but pushed for
collaborative agreements that maintain business sustainability.
(Report by Fabian Cambero; Writing by Alexander Villegas
Editing by Alistair Bell)
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