This week: Chile plans to increase taxes on copper mining, which could spell trouble for global industries. Colombia protests just the latest in a wave of Latin American dissatisfaction. Footballers cutting in line for vaccines.
Chile’s mining royalties plan could be bad news for global industry
Last week, we discussed how Latin American governments are scrambling to increase tax revenue amid the pandemic. Chile is the latest nation to get creative in its search for funds, and has gone straight for its golden egg: copper mining.
Why it matters. Chile supplies 28 of the world’s copper — and demand for the metal is rising, propelled by the growing electric vehicle and battery industries. Thus, higher production costs in Chile could have global ripple effects.
The proposal. Chile’s lower house approved a mining royalties bill establishing a 3-percent levy on the sale price of all copper and lithium extracted from the country. And this tax rate will follow copper prices traded on the London Metal Exchange — if the annual average quote surpasses USD 2 per pound, royalties will rise proportionally until reaching 75 percent.
- Indeed, copper is trading at nearly USD 5 per pound now — and could...