As the leading copper-producing country drafts a new constitution and heads for presidential elections, an influential mining union lobbies for a bigger role for the state in mining and a much bigger government takeover .
The FTC, which brings together the unions of Chilean state-owned copper producer Codelco, wants private mines to pay 75% of revenue in taxes and ensures that Codelco takes the lead on all major new projects, the president said. Patricio elgueta said in an interview. FTC directors present the proposal to lawmakers, other politicians and members of the Constitutional Assembly.
Normally, the manifesto of a union federation – even one that represents more than 15,000 workers – would not have much legislative or regulatory influence, especially with a pro-market government in power. But the political winds in Chile have turned. An outbreak of social unrest at the end of 2019 led to the drafting of a new charter by a group made up mainly of independents and leftists. At the same time, a one-off copper tax is being debated in Congress as the country seeks ways to increase social spending and rectify inequalities exacerbated by the pandemic.
“We have hope and the faith that we will be heard, ”said Elgueta of the Salvador de Codelco mine in northern Chile. “The government must have an essential role.
The federation’s tax proposal would focus on “economic returns”, unlike a Senate royalty bill that would impose graduated duties on sales. It would also differentiate larger and smaller mining operations, and impose higher levies on companies that export semi-processed copper than those that ship refined metal products.
While Elgueta has said the royalty bill is a “step forward”, the FTC’s plan is “more ambitious.” The government and the mining industry oppose the bill, saying the much higher implicit tax burden would make investing in Chile less attractive, even with high copper prices.
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Codelco, formed by the nationalization of US-owned mines in the 1970s, has seen its share of Chilean copper production drop to around 30% as global heavyweights such as BHP Group and Anglo American Plc have developed d ‘huge surface mines.
Elgueta said the state-owned company should be able to take on future projects despite its current 10-year, $ 40 billion program to overhaul aging deposits, possibly by tapping into a public fund.