Chile Mining Industry Fiscal Regime Analysis – Governing Bodies, Regulations, Licensing Fees, Taxes, Royalties, 2023 Update

Chile Mining Industry Report Overview

According to COCHILO, Chile had an investment of $73.7 billion as of December 2022. Significant investments in Chile’s mining sector originate from a total of multiple countries, including both domestic and foreign companies.

The Chile mining industry report provides comprehensive coverage of Chile’s mining fiscal regime. The report focuses on the mining fiscals’ key aspects such as governing bodies, laws and regulations, governance frameworks, and sustainability practices. The report also includes mining-related taxes and royalties.

Domestics as well as foreign companies have invested in development projects of Chile such as Capstone Copper.

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Chile Mining Industry Dynamics

The Chilean Lower Chamber of Congress recently approved the latest amendment to the royalty bill. The new bill will require large companies to pay more taxes and royalties to the government. With the new bill in place, the country’s copper miners’ cash costs will rise, and expansion and development plans will be reassessed. Chile is expected to become the country with the highest tax burden, affecting miners with low operating margins the most. Furthermore, the bill is expected to hinder investment and undercut competitiveness in a country that accounts for more than a quarter of global copper production.

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Chile Mining Industry - Governing Bodies

The Ministry of Mining, National Service of Geology and Mining, Ministry of Mines, Ministry of Environment, and Chilean Copper Commission are the primary regulatory authorities that govern the mining industry in Chile. The Mining Code and the Constitutional Organic Law on Mining Concessions are responsible for granting mining concessions for either exploration or exploitation.

Ministry of Mining: The Ministry’s mission is to develop public policies which boost the industry’s contribution to national development. The primary objectives of the body are formulating policies aimed at integral productive development, reducing barriers to investment, contributing towards harmonization between the mining industry and the environment, and moving towards the integration of women in the mining industry.

Mining Code: The Mining Code and its regulations form the principal regulatory framework for the mining industry in Chile. The code explains that the state has the absolute, exclusive, and inalienable right over all mines in the country, irrespective of ownership by any person or legal entity.

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Chile Mining Industry – Mining Investments

Chile is the fourth most prominent exploration destination in the world.

Several countries have invested in Chile mining projects. The leading investor is Chile itself, primarily through CODELCO and Antofagasta Minerals. The other regions include Canada, European Union (EU), Japan, the UK, and others.

Several prominent companies have made substantial investments in Chile’s mining industry. These include Teck Resources, Capstone Copper, Los Andes Copper, and Kinross among others.

Within Latin America, Chile had the highest share of the region’s total investment in mining exploration. This is followed by Mexico and Peru.

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Chile Mining Industry – Taxes and Royalties

Business entities registered in Chile are taxed on their worldwide income. Companies incorporated outside Chile are only subject to taxation on income from their Chilean operations.

The main taxes applicable in the Chile mining industry are Corporate Income Tax (CIT), Withholding tax, real estate tax, stamp tax, VAT, and customs duties.

Real Estate Tax: Real estate tax is imposed over the official valuation of real estate properties. For farming and non-farming properties, the annual rates of real estate taxes are 1% and 1.4%, respectively; some properties are exempted from this tax.

For more insights on the taxes and royalties in the Chile mining industry market, download a free sample report

Recent Development

• Amendment to Royalty’s Bill: 17 May 2023: The Chilean Lower Chamber of Congress approved the latest amendment to the Royalty Bill, which will require large companies to pay more taxes and royalties to the government.
• Nationalizing lithium industry: In April 2023, Chile President Gabriel Boric announced the country’s plans to nationalize its lithium industry.

Scope

The report focuses on the mining fiscals’ key aspects such as governing bodies, laws and regulations, governance frameworks, and sustainability practices. The report also includes mining-related taxes and royalties.

Reasons to Buy

• To help businesses navigate the complexities and comply with the requirements.
• To enable stakeholders to make informed decisions by understanding the current state of the mining sector in Chile
• To help evaluate the level of accountability and stability within the industry
• To help evaluate and manage potential challenges effectively.
• To understand the country’s overall mining fiscal landscape
• To provide valuable insights for stakeholders, policymakers, and investors in understanding the dynamics and potential of the country’s mining industry
• To help businesses understand challenges and proactively develop risk mitigation strategies.

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