Chile’s decades-old mining deals may hinder bid to lift copper royalties

With copper prices soaring and Chile’s economy reeling from the COVID-19 pandemic, lawmakers want to fund recovery efforts by hiking royalties on the booming mining sector but the drive could flounder because of deals that previous governments signed decades ago to freeze tariffs on the biggest miners.

Major foreign miners operating in the world´s largest copper producer obtained tax stability agreements that maintain payment regimes, and a Reuters review shows these do not expire for two to 15 years.

The deals, meant to buffer investors from political or economic upheaval, helped attract investments in some of Chile’s largest mines.

Experts interviewed by Reuters said that even after likely passage of a law outlining a royalty as high as 75% on copper sales, the agreements could diminish Chile’s windfall.