Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Global miner BHP Billiton is likely to reconsider its investment plans in Chile, the world’s No. 1 copper producer, if the government moves ahead with mining tax hikes, according to a report on Sunday.
The company was quoted by El Mercurio newspaper as saying in a statement 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. “If the proposed royalty (hike) materializes, we would have to reevaluate our investment plans for Chile.”
BHP did not immediately respond to a request for comment.
BHP is a major player in Chile, where it operates the world’s largest copper mine, known as Escondida. In April, BHP said it was willing to invest another $10 billion in Chile over the years, but only if the regulatory and fiscal conditions were appropriate.
Chilean Finance Minister Mario Marcel has said that raising mining royalties is his “priority number one” and the top goal of the left-wing administration that was inaugurated earlier this year. The government wants to use the tax income to fund social programs.
The tax reforms, which also include a wealth tax on high earners among other provisions, aim to raise 4.1% of GDP over four years, with 0.7% going to a new guaranteed minimum pension fund.
Other global miners operating in Chile include Glencore, Anglo American, Freeport McMoRan and Antofagasta.
(By Fabian Cambero; Editing by Cynthia Osterman)
Comments
Balter
More likely they hope to set up a black market and collect bribes – the usual playbook of communist crime syndicates – or, like Ghana, sell the forward royalties for half price into an offshore trust account not subject to transparency regulations…. there’s always a way.