BHP bets billions on Chile mines to face global copper crunch
BHP detailed to investors this week plans to spend $10.7 billion to $14.7 billion within about 10 years.
Chile’s top private miners see as “very good news” what they called a “change of tack” by senators considering a stiffer tax on mining royalties that was approved by congress’s lower house last month, a spokesman for the group said on Tuesday.
Joaquin Villarino, head of Chile’s Mining Council, which represents major global miners such as AngloAmerican, BHP, Antofagasta, Teck and Freeport-McMoRan, said the state has the “legitimate” power to seek to increase tax revenues in moments when, as at present, copper prices spike – but not at the expense of development in the sector.
The Chilean lower chamber of Congress in May voted in favour of a royalties bill which would see impose a tax as high as 75% on sales of copper as prices rise to pay for social programs during the covid-19 pandemic.
Chile is also redrafting the country’s constitution, one of the key demands of fiery social protests that ripped across the country in October 2019
The bill now sits with the senate’s mining committee which is hearing evidence from stakeholders including former presidents, current and former mining executives, academics, sector analysts and mine supplier groups.
“The conversation in the senate regarding the royalty tax is starting to take a different tack and that is a very good news,” Villarino told a private seminar.
He did not expand on what change in direction he saw by the senate, but Chile’s centre-right government has expressed the hope the legislation would be considered “more seriously and calmly” as it progressed through congress’s more conservative upper chamber.
Chile is also redrafting the country’s constitution, one of the key demands of fiery social protests that ripped across the country in October 2019.
The ruling centre-right Chile Vamos coalition failed to win a controlling third of the seats on the body drafting the new text. Independent candidates won a majority, sparking alarm among investors that there may be drastic changes in store to the country’s free market model.
Villarino said miners were staying calm and seeking to participate in the process, with the Mining Council already putting forward proposals for discussion.
“Instead of being hysterical or scared, thinking about moving your money to Miami and where to go and live, one should contribute to the conversation, advance ideas, maintain some calm in the discussion,” he said.
He rejected suggestions that constituents would seek to replicate Venezuela’s socialist model, saying there would be limited support for such a swing in Chile.
But he cautioned: “We can be central actors in sustainable global development and we must not miss out on that because of wrong-headed decisions.”
(By Fabian Cambero and Aislinn Laing)
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