Chile’s Senate approved a bill to raise taxes for copper producers as the left-leaning government attempts to increase its take of mining earnings to boost social spending.
Senators voted overwhelmingly in favor of a proposal to take the tax burden for companies including BHP Group Ltd. and Anglo American Plc to levels just above other major producing nations. The bill now returns to the Lower House for a potential final vote.
Finance Minister Mario Marcel made a series of concessions to win over the support of enough opposition senators. Amendments included reducing a cap on the effective tax rate in a bid to maintain Chile’s competitiveness as an investment destination.
At stake are tens of billions of dollars in expansion projects that are key to meeting global demand for a metal used in batteries, solar panels and other green technologies.
Much of the debate prior to the vote centered on the ceiling, which the government agreed to lower to 46.5% of operating profit for large copper producers. The would translate into an average effective rate of about 45%, according to consulting firm Plusmining. Chile’s major rivals have a burden of 41% to 44%.
The government agreed to make final amendments to the bill after a series of electoral and legislative defeats. Over the weekend, opposition groups secured more than the three-fifths majority needed to push through articles in a council charged with drafting a new constitution. That followed defeats of a previous constitutional rewrite and a broad tax reform proposal.
“This has been a tremendously important step” for raising funds on a regional level, Minister Marcel told reporters after the vote late Wednesday. Pending approval in the lower house, it will also provide the industry with “a clear panorama to make decisions.”
--With assistance from Valentina Fuentes.
