18 Jul BHP displays concern over proposed mining tax hikes in Chile
BHP is likely to reconsider its investment plans in Chile should the world’s largest copper producing country go ahead with proposed mining tax hikes, according to local newspaper report.
The company was quoted by El Mercurio newspaper as saying that higher taxes would make Chile more expensive than other top mining jurisdictions like Australia, Canada and neighbouring Peru.
“We have serious concerns with regards to the new royalties,” the company said in a statement reported by El Mercurio yesterday. “If the proposed royalty (hike) materialises, we would have to re-evaluate our investment plans for Chile.”
BHP operates the world’s largest copper mine in Northern Chile – Escondida – along with the smaller, but still sizeable, Spence and Cerro Colorado operations. In April, the company said it was willing to invest another US$10 billion in Chile in the coming years, but only if the regulatory and fiscal conditions were appropriate.
The new leftist government under President Gabriel Boric is promising to shake up Chile’s mining sector with pledges to tighten environmental regulations and to raise mining royalties to fund social programmes.
Tax reforms proposed by Finance Minister Mario Marcel include a wealth tax on high earners. The governments aims to raise 4.1% of GDP over four years through the tax hike, with 0.7% going to a new guaranteed minimum pension fund.
Other global mining giants operating in Chile include Glencore, Anglo American, Freeport McMoRan and Antofagasta.