Chile Mining Royalty Bill Advances After Committee Approval by Reuters

A Chilean congressional committee has approved a contentious mining royalty bill, bringing it closer to final approval as part of the government’s extensive tax reform plans. The proposal, which has faced significant criticism from the mining industry, was introduced in mid-2022 with the aim of increasing royalties on sales in Chile, the largest producer of copper worldwide.

After receiving approval from the mining and energy commission, the bill will move to a Treasury commission for further review and must gain approval before it is subjected to a final vote. However, there remains ongoing disagreement regarding certain aspects of the proposed legislation.

Senator Loreto Carvajal, the president of the mining commission, expressed concerns during the session, stating, “The tax rate is a formula that has not convinced all of us. The issue of our future competitiveness in relation to nearby countries and others is still pending.”

In October, the government made revisions to the bill, proposing a fixed sales royalty of 1% for large mining companies and eliminating clauses that tied payment levels to copper prices. While the mining industry welcomed these adjustments, they still believe the overall tax burden is excessively high.