The end of the commodities super-cycle is creating the conditions for Chile to discuss changes to a four-decades-old law that gives the armed forces 10 percent of copper giant Codelco’s sales, said Mining Minister Aurora Williams.
A bill to scrap the law, which was created in its current form by late dictator Augusto Pinochet, has been languishing in Congress since 2011, when copper traded above $4 a pound amid surging Chinese demand. Now the metal is about $2 with miners including Codelco grappling with cost cutting measures to remain profitable.
While President Michelle Bachelet has focused on education and tax reforms since taking office in March 2014, copper’s collapse could open the door to revising the so-called copper reserve law as government revenue from Codelco shrinks, Williams said in an interview Monday in Santiago.
Scrapping the military payments would allow Codelco, the world’s largest copper producer, to finance more of its planned investments internally.
“It’s an area we think discussions can be held, we have seen it with the finance and defense ministers,” Williams said. “Today, Chile is a different country with different needs, copper prices and aspects that could be monitored and make a much more efficient law. One could suppose there are better conditions today to start conversations.”
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