Chile mining body warns new fuel tax threatens competitiveness

SANTIAGO, March 25 (Reuters) - A temporary ​tax adjustment ⁠on diesel driven by ​the Chilean government to mitigate rising fuel prices will hit the ​mining ‌sector's competitiveness, the top mining body in the world's ⁠largest copper producer warned.

• The government measure ⁠reduces the recovery of ​a specific diesel tax for certain companies to finance mitigation measures without increasing fiscal spending. • Chile's Mining Council, whose ​members ‌include state-owned Codelco and international miners BHP, Glencore, Freeport-McMoRan and Anglo American, said the industry will pay about $100 million in just six months linked to the ​modification. • The association added that the mining sector ‌will bear 74% of the measure's total cost, based on the government's estimated total ‌revenue of $135 million. • The group said in a statement that altering a tax to selectively burden strategic sectors ​is not equitable and will negatively affects their competitiveness. • Chile's mining ‌sector faces high operational costs and excessive permitting bureaucracy.

CONTEXT • On Monday, Chile's government invoked a clause in its ⁠fuel stabilization mechanism ⁠to rapidly align with surging international ‌prices. • To offset rising gasoline and diesel prices, the government ​in Chile, one ​of Latin America's largest oil importers ‌due to a lack of domestic production, froze public transport fares and lowered the price of kerosene.

Anglo American

Glencore

Freeport-mcmoran

Antofagasta