SANTIAGO (Reuters) – The world’s largest copper miner, Codelco, may see a boost in investment cash regardless of who wins next month’s presidential runoff in Chile, as both candidates have vowed to end the state-run firm’s funding of the military.
Conservative front-runner Sebastian Pinera and his center-left rival Alejandro Guillier, set to face off in the Dec. 17 vote, have both pledged to overturn the dictatorship-era law that transfers to the military 10 percent of Codelco’s export sales, worth $866 million last year.
There is no guarantee that Codelco [COBRE.UL], which delivers all its profits to the state, would keep the funds should the law be overturned. That decision would ultimately lie with Congress.
But the candidates’ rare agreement that the tax should be eliminated bodes well for the cash-strapped miner, which needs to invest an estimated $20 billion to revamp its aging mines, expand abroad and keep output flowing.
“This tax affects the competitiveness of Codelco, its ability to finance its operations and investments and its possibilities to grow internationally,” Guillier, a senator and former journalist, wrote in a proposal describing his plans for Chile’s mining industry.