Chile has gained much-needed clarity about the taxes copper miners will face starting in 2024 after congress approved the mining royalty bill.<\/p>\n
\u201cThe best thing is having finally closed the discussion. The uncertainty that reigned about this matter for several years undoubtedly made it more difficult to make mining investment decisions in Chile,\u201d Rony Zimerman, lead mining lawyer at the local Lembeye law firm, tells BNamericas.<\/p>\n
Another wise move was to have lowered the tax rates from the original bill presented in 2018 as part of tweaks and changes made throughout the four-year debate.<\/p>\n
A maximum tax burden of 46.5% was set for mining companies that produce over 80,000 tonnes per year of copper and 45.5% for those in the 50,000 to and 80,000t\/y range. The rate will be calculated on the adjusted mining operational taxable income in both cases.<\/p>\n
In addition, an ad valorem tax is included
\nwith a fixed rate of 1% on annual sales. The bill replaces a specific tax on mining activity that hovered around 37%.<\/p>\n
The bill was approved by the lower house on Wednesday, after the senate signed off on May 11, and is now awaiting President Gabriel Boric\u2019s signature to become law.<\/p>\n
Perhaps now the only uncertainty left hanging over the sector is how the bill may affect the
\ncompetitiveness of about 13 large miners that account for over 60% of Chile\u2019s copper production.<\/p>\n
Andr\u00e9s Ossand\u00f3n, tax director at the Arteaga Gorziglia law firm, says that the new royalty payments will be higher than in other jurisdictions that compete with Chile. \u201cFrom a tax point of view, it could affect the investment decision,\u201d he tells BNamericas.<\/p>\n
\u201cParticularly since the new law will not be enacted alongside an incentive program for new exploration or improvements to the current permitting system, which would help keep Chilean mining attractive for
\ninvestment and help offset lower mineral grades, high costs and permitting challenges\u201d, said Zimerman.<\/p>\n
Jorge Riesco, head of mining assocation Sonami, also believes that investment incentives should have been considered, such as \u201ca term of tax invariability of not less than 15 years, with the purpose of giving certainty and security to the sector to develop future projects.\u201d<\/p>\n
Miguel Zauschkevich, head of Chile\u2019s mining chamber, called on the authorities to seek ways to promote national mining through efficient management of the permitting process for new projects and expansions.<\/p>\n
Starting in 2025, some of the tax revenue will be distributed among three regional funds through which the Boric administration will disburse nearly US$450mn for education, health, housing and employment investments in the country\u2019s mining districts.<\/p>\n
Finance minister Mario Marcel said funds will also be used to finance infrastructure works and combat crime.<\/p>\n
Some of the miners affected by the new royalty scheme include state-owned Codelco, MineraEscondida, Antofagasta Minerals, Anglo American, Lumina Copper Mining, Lundin, Glencore, Teck, Freeport\u2013McMoRan,
\nSierra Gorda SCM, Collahuasi and Capstone Copper.<\/p>\n
Written by: Elinor Trebilcock<\/p>\n
Source: https:\/\/www.bnamericas.com\/en\/analysis\/the-good-the-bad-and-the-ugly-chiles-new-royalty-law<\/p>\n","protected":false},"excerpt":{"rendered":"
Chile has gained much-needed clarity about the taxes copper miners will face starting in 2024 after congress approved the mining royalty bill. \u201cThe best thing is having finally closed the discussion. The uncertainty that reigned about this matter for several years undoubtedly made it more difficult to make mining investment decisions in Chile,\u201d Rony Zimerman, […]<\/p>\n","protected":false},"author":1,"featured_media":7720,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[32],"tags":[],"class_list":["post-7830","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal-news"],"acf":[],"featured_image_src":{"landsacpe":["https:\/\/www.lembeye.cl\/wp-content\/uploads\/2024\/06\/LO-BUENO-LO-MALO-Y-LO-FEO-DEL-NUEVO-ROYALTY-MINERO-EN-CHILE-1140x445.png",1140,445,true],"list":["https:\/\/www.lembeye.cl\/wp-content\/uploads\/2024\/06\/LO-BUENO-LO-MALO-Y-LO-FEO-DEL-NUEVO-ROYALTY-MINERO-EN-CHILE-463x348.png",463,348,true],"medium":["https:\/\/www.lembeye.cl\/wp-content\/uploads\/2024\/06\/LO-BUENO-LO-MALO-Y-LO-FEO-DEL-NUEVO-ROYALTY-MINERO-EN-CHILE-300x179.png",300,179,true],"full":["https:\/\/www.lembeye.cl\/wp-content\/uploads\/2024\/06\/LO-BUENO-LO-MALO-Y-LO-FEO-DEL-NUEVO-ROYALTY-MINERO-EN-CHILE.png",1268,758,false]},"yoast_head":"\n