LatinNews Daily - 4 August 2023

* Chile’s President Gabriel Boric has promulgated the new mining royalty law which will increase the tax burden on the mining industry and raise funds for social development projects. The law, which passed congress in May this year, is forecast to raise around US$1.35bn in annual tax revenue from 2024 (equivalent to 0.45% of GDP). The law proposes a maximum effective tax rate of 46.5% of earnings for companies which produce more than 80,000 tonnes (t) of fine copper a year, and a rate of 45.5% for those that produce between 50,000 t and 80,000 t. Mining companies which produce less than 50,000 t of copper per year are unaffected by the new law. From the funds that are raised, US$450m will be distributed annually through three funds to support regional development in Chile. The regional fund for productivity and development (US$225m) is aimed at all regional governments to finance programmes that promote regional development and scientific and technological investment. The fund for territorial equity (US$170m) will seek to benefit the most vulnerable municipalities in the country. Finally, the mining communities fund (US$55m) will support municipalities which have mining-related activities within their territory.