Chile royalty regime changes may jeopardise future investments – Woodmac (Mining – July 5, 2021)

Although proposed changes to Chile’s mining royalty regime are not expected to have a drastic impact on the copper-producing nation’s production landscape in the near term, amendments do risk compromising continued appetite for large-scale, long-term investments.

This is according to resources consultancy Wood Mackenzie analyst William Tankard, who stresses that Chile has to careful consider the implementation of its royalty regime reform.

“It is unhelpfully alarmist to place primary focus on the proposed amendments [impact] on producers’ value loss under current spot prices, which are at record highs,” he cautions.

A motion to reform Chile’s royalty regime for copper and lithium mining has been on the table since September 2018. Originally, Bill 12093-08 proposed a production-based 3% royalty on the total value (ad valorem) of production for companies producing more than 12 000 t/y copper.

However, an amendment passed by the Chamber of Deputies, Congress’ lower house, in May included a sliding scale component to the royalty.

For the rest of this article: