New tax could have explosive impact. Image: Blasting at Radomiro Tomic Codelco
Chile’s lower house approved a progressive rate on copper sales in what could become one of the heaviest tax burdens in global mining, potentially stalling investments and boosting prices.
Lawmakers, who had already approved a bill to introduce a flat 3% on sales of both copper and lithium, on Thursday voted 78 to 55 to add a mechanism of marginal rates as copper prices rise, with the highest bracket set at 75%.
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In doing so, the world’s biggest copper industry now moves closer to what the local mining society describes as an “almost expropriatory” system. Its proponents, including Communist Party representative Daniel Nunez, said the new mechanism would reap $7 billion a year at a time when Chile is looking to resolve lingering inequalities. Opposed by the government, the bill now goes to senate.