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Chilean think-tank says Codelco pays more taxes but extracts less copper than private companies

El Teniente division. (Image by Codelco, Flickr.)

A recent report by Chile’s Center for National Studies of Alternative Development (CENDA) shows that, between June 2021 and June 2022, Codelco was responsible for 30% of the country’s annual copper production and contributed 7.6% of the mining tax revenue while private companies extracted 70% of the copper and contributed 5% of tax revenues.

The Center found that overall and in real numbers, what it calls ‘private mining’ paid $3.5 billion in taxes, which is equivalent to 8.9% of the value of the copper extracted in the 12 months under study. Codelco, on the other hand, contributed $5.3 billion, which is equivalent to 33.2% of the value of copper extracted.

To reach these conclusions, the think-tank used the ‘royalty equivalent’ measure, which indicates the proportion of each ton of copper produced that should go to taxes.

“Total taxation of private companies is equivalent to less than a tithe of the value of each ton extracted. Codelco’s is equivalent to about a third of the value of each ton extracted,” the report reads. “Thus, the gigantic subsidy received by private mining companies becomes evident.”

According to the CENDA, the lower ‘royalty equivalent’ paid by private mining compared to Codelco has represented an additional benefit of nearly 100 billion dollars for these companies, since 2006.

Chilean think-tank says Codelco pays more taxes but extracts less copper than private companies_1
Contribution of mining revenue to total tax revenue. Green = total tax revenue. Beige = private mining contributions. Light brown = Codelco’s contributions. (Graph by CENDA based on data from Cochilco and the National Treasury’s Budget Directorate).