An influential mining union in Chile is pushing for a greater role in mining development as the country's largest copper producer drafts a new constitution and moves toward a presidential election.
President Patricio Elgueta said in an interview that the FTC had brought together unions at Codelco, Chile's state-owned copper producer, to want private mines to pay a 75 per cent income tax and to ensure that Codelco would play a leading role in any major new projects. FTC directors are selling the proposal to lawmakers, other politicians and members of the Constitutional Assembly.
Normally, the TUC's manifesto, even on behalf of more than 15,000 workers, doesn't have much impact on legislation or regulation, especially under market-friendly governments. But the political winds in Chile have shifted. Social unrest that erupted in late 2019 led to a group of mostly independents and leftists drafting a new charter. At the same time, Congress is debating a windfall tax on copper profits as the country seeks to boost social spending and redress inequalities exacerbated by the pandemic.
Speaking at the Codelco Salvador mine in northern Chile, Mr Elgueta said the government needed to play an important role.
The federal tax proposal would focus on "economic returns," unlike the Senate royalty bill, which would impose a progressive tax on sales. It would also distinguish between large and small mining operations and impose higher taxes on companies that export semi-processed copper than those that export refined metal products.
While Mr Elgueta said the royalty bill was "a step forward", the FTC's plan was "more ambitious". Both the government and the mining industry oppose the bill, arguing that a heavier tax burden would make Chile less attractive to invest in, even at a time of high copper prices.
Codelco, a former U.S. -owned company that was nationalized by Chile in the 1970s, has seen its share of Chile's copper production shrink to about 30 percent as global giants such as BHP Billiton and Anglo American develop large open-pit mines.
