Chile lawmakers mull additional mining tax for copper, lithium
The Lower Chamber of Chile’s Parliament has begun studying a project that would set a 3% mining royalty for all companies operating in the country, which is the world’s top copper producer and the one with the largest known reserves of lithium.
The proposed tax, to be applied on the nominal value of extracted metals, would affect copper miners that produce more than 12,000 tonnes of the metal annually and those extracting 50,000 tonnes a year of lithium, used in batteries that power electric cars.
The idea is to have miners contributing part of their profits to the regions where they operate, Radio Universidad de Chile reported (in Spanish).
The last time Chile increased mining royalties was in 2010, following an 8.8 magnitude earthquake that left the government scrambling for additional funds to rebuild the devastated areas.
The bill, put forward by lawmakers from a number of small parties pushing for Chile's decentralization, is not thought to have the backing of the government or larger opposition parties.
The last time Chile increased its mining royalties was in 2010, following an 8.8 magnitude earthquake that left the government scrambling for additional funds to rebuild the devastated areas.
At the time, mining taxes went from between 4 and 5 percent to 4 percent to 9 percent of sales on a sliding scale. The royalty rose again early this year to between 5 to 14 percent.
After the lost crown
Chile, which holds about 52% of the world’s known lithium reserves, recently lost its top lithium producer crown to Australia. But both companies and the government are working hard on reversing that.
Over the past several months, Chile’s SQM — the world’s number two lithium producer — has been expanding its mines. The company recently finished the first stage of a lithium carbonate ramp-up in Chile’s Salar del Carmen, reaching a capacity of 70k million tonnes a year.
“Our next step will be to work towards our goal of 120k MT/year, which is expected to be completed by the end of 2019,” chief executive officer Patricio de Solminihac said last month.
The firm actually believes it will soon overtake US-based competitor Albemarle as the world's top lithium miner, by 2022 to be exact. SQM expects to boost its production capacity that year to 28% of the world's total versus Albemarle's 16%.
Chile expects lithium to soon become its second largest mining asset, just behind copper. It's currently the country's fourth biggest export.