SANTIAGO, May 4 (Reuters) - Chile's National Mining Society
(Sonami) has warned that a royalty project being discussed in
Congress proposes levels of taxation that are "akin to
expropriation" and would paralyze investment in the Andean
The plan, which proposes a progressive tax of at least 3% on
copper and lithium sales, is driven by opposition-party
legislators as a way to fund more expansive government social
programmes as the country struggles to recover from the
The bill has been tweaked in Congress' mining and finance
commissions and will be voted on in the chamber of deputies on
Thursday. If approved, it will move to the Senate.
Chile has seen a number of initiatives aimed at extracting
more value from its largest industry over the years but the
latest bill is gathering steam and alarming miners.
It follows intense social protests over inequality and
elitism that exploded in October 2019 and simmer to this day,
and comes after economic hardships inflicted by the pandemic.
The government opposes the royalties plan, with Mining
Minister Juan Carlos Jobet saying it risked putting Chile
"completely out of kilter" with other mining nations.
However, last week Congress - including ruling-coalition
lawmakers - approved a third drawdown by citizens on Chile's
privately held pension pots despite staunch government
opposition. The country is also in the process of forging a new
constitution - a key demand of the protests.
Big miners are stepping up lobbying efforts to oppose the
Diego Hernandez, the president of Sonami, which represents
copper miners across Chile, issued a statement reiterating
earlier comments that the project is unconstitutional, and that
if it were approved as currently conceived it would have
serious consequences for the industry and the country.
He said that under the current proposal, 12 of the 15
biggest miners operating in the country would end up operating
at a loss.
"These are tax levels akin to expropriation and this is
going to inhibit investment immediately," he said.
In addition to the state-owned Codelco, Chile is host to
mining operations by BHP Group Ltd, Anglo American Plc
, Glencore Plc, Antofagasta Minerals
and Freeport-McMoRan Inc.
(Reporting by Aislinn Laing in Santiago
Editing by Matthew Lewis)