The Chilean government have announced the introduction of a tax
reform bill that will introduce a new royalty system payable by
copper miners. This bill contains a variable royalty rate,
dependent on the quantity of copper sold. Rates could increase to
as high as 32% depending on the price of copper. Given Chile is the
world's largest copper producer, the amendment of the royalty
rates will have an outsized impact on copper supply and prices
worldwide.
The Copper Regime in Chile
The Current Regime
Currently, Chile utilises a specific mining tax to tax mining
activities, as opposed to a royalty scheme. Chile's specific
mining tax, Impuesto Especifico a la Actividad Minera (IEAM), is
regulated through Articles 64-bis and 64-ter of the Chilean Income
Tax Law. The law was introduced on January 1, 2006, through Law No.
20026, and was later amended in 2010 through Law No. 20469. Under
this law, tax payable will depend on the amount of fine copper sold
in metric
