Copper giants safe in our hands, Chile leftist’s campaign says
Bloomberg News | November 5, 2021 |

Gabriel Boric. Credit: Department of Public Policy at CEU

Mining heavyweights such as BHP Group and Anglo American Plc have nothing to fear if former student protest leader Gabriel Boric becomes Chile’s next president, according to one of his top advisers.


While a Boric government would raise taxes to help fund a green transformation, it wouldn’t overburden the industry by removing incentives to invest, said Willy Kracht in a telephone call Thursday. The left-leaning candidate wants the state to play a more active role in technology projects and lithium extraction, but has no plans to interfere in any existing concessions.

“There’s no intention to change the rules of the game, just to strengthen institutionality so that things function better,” said Kracht, who is head of the mine engineering department at the University of Chile and a director at copper research center CESCO.

Just two weeks away from the first round of voting, the comments may go some way to easing concern that a Boric victory would stifle investment in a country that accounts for more than a quarter of mined copper.

Mining companies have warned that a royalty bill currently before congress would erode Chile’s competitiveness by creating one of the heaviest tax burdens among major copper nations.

Still, government and industry representatives agree that there is scope to lift taxes in some form. Boric’s proposal is two-pronged — a royalty on sales and a sliding levy on profit. That would raise the equivalent to an additional 1% of gross domestic product.

“That mixed structure — with ad valorem and progressive components — should work better in terms of collection without putting at risk the feasibility of development projects,” Kracht said, without offering proposed rates.

He also said there’s considerable consensus on what has to be done in terms of decarbonization and social engagement.

One priority of the Boric team is to set up a development bank that helps fund technology in collaboration with the private sector. For example, the state could help fund a privately-run project for mines to convert to electric trucks, which could then be marketed as a solution in neighboring countries.

Boric’s program also prioritizes the development of state companies Codelco and Enami and will look to promote investments in local refining, as well as gradually raising carbon and fuel taxes.

(By James Attwood)