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NEW YORK, Oct. 19 (Reuters) – Mining behemoths BHP and Antofagasta Minerals warned on Wednesday that Chile’s proposed mining royalty law will reduce the country’s competitiveness and prompt miners to reconsider their financial commitments.
The government of Chile, which is the top copper-producing country in the world, has suggested a royalty with a component based on sales and the other subject to profitability, which advances as copper prices rise.
BHP’s vice president of corporate relations for the Americas, Rene Muga, stated in a speech to Chile’s Congress that the present measure would have a negative impact on the company’s activities in other countries as well as its ability to compete internationally.
It is our responsibility to caution people that Chile cannot excessively raise taxes without adversely hurting investment levels in today’s fiercely competitive global economy, Muga said.
The effort, he continued, would cause the mining business to reevaluate its announced $10 billion investment portfolio because it was created “without contemplating such an exorbitant tax burden increase.”
For his part, Rene Aguilar, vice president of corporate relations at Antofagasta Minerals, noted that the proposed revisions would result in a total tax burden of more than 48%, bringing Chile on level with high-tax nations like the Congo, Mongolia, and Zambia.
The depreciation of investments must be taken into account when determining mining profits, according to Aguilar. This is a really important aspect, especially for organisations like Antofagasta, which might invest close to $5 billion over the next few years.
Both company officials agreed that the mining industry might contribute more, but they urged for cooperative arrangements that preserve their companies’ viability.
Group Media Publication
Construction, Infrastructure and Mining
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