The Government of Chile is considering increasing taxes on mining companies to help pay for the nation’s reconstruction following last month’s earthquake, a ministry official said.
According to Bloomberg, Chile’s Mining Council has warned, however, that such a move could hinder mining investment in the country, planned at $22.1bn over the next five years.
Deputy Finance Minister Rodrigo Alvarez said the government of Sebastian Pinera is already considering changes to mining taxes after last month’s 8.8-magnitude earthquake damaged infrastructure and buildings.
Endorsing the tax increase, Finance Minister Felipe Larrain said that higher taxes will not be the centrepiece of reconstruction funding and any increase would be moderate.
Chile’s Mining Council, which includes BHP Billiton, Rio Tinto and Anglo American, said the tax increase may discourage planned investments.
The government will also utilise its $11.3bn copper savings fund and has not ruled out increasing mining royalties to 8% and allowing mining contracts to be extended until 2040.
An increase in mining royalties will give the government revenue of $500m.