Latest situation in Chile July 2023

①Mining

In August, the Chilean Senate Mining Committee, after hearing from companies developing lithium projects worth more than USD 3 billion in the country, proposed a reform plan that would recognize lithium rights and allow private companies to develop lithium.

Also, in the same month, Chile’s Ministry of Mines published an official gazette stating that President Boric had enacted the Mining Royalties Law, which was approved by Congress on May 17, 2023.

This law targets mining companies that make 50% or more of their sales from copper and produce 50,000 tons or more of copper concentrate per year, and are subject to a 1% ad valorem tax on annual copper sales and operating profits. Tax rates range from 8% to 26% depending on the rate. The upper limit of the potential tax burden was set from 45.5% (annual production of 50,000 to 80,000 tons) to 46.5% (annual production of 80,000 tons or more) depending on production volume. However, the current tax burden will be maintained for small and medium-sized enterprises with a production volume of less than 50,000 tons.

This law will go into effect in 2024, and a portion of the tax revenue will be returned to states and municipalities whose territories have operations directly related to mining activities to improve productivity.
(Check out this article as well, for details about the Chilean Mining Royalties Law.)

②Economics

The economic activity index in June recorded -1.0%. In the mining section recorded 1.1%.
The mining production index in the same month was -0.4%, and copper production decreased by 0.9%.
The export amount in July was 7.40 billion dollars (-7.6%), of which mining products raised 4.13 billion dollars (-9.7%, 55.9% of the total), of which copper raised 3.36 billion dollars (-2.8%, 81.3% of the total mining export value).
On the other hand, import value in the same month was $6.58 billion (-17.0%), and the trade balance was a surplus of $810 million.
*Percentages from the same month of the previous year

The amount of trade with China, Japan, and South Korea (June) resulted as below:

With China: exportation 3.02 billion (-10.5%), importation 1.58 billion (-8.2%), total amount of trade 4.60 billion (-9.7%)
With Japan: exportation 590 million (31.2%), importation 170 million (-0.4%), total amount of trade 750 million (23.3%)
With South Korea: exportation 590 million (20.8%), importation 100 million (-20.2%), total amount of trade 690 million (12.2%)
*Dollars, comparing to the same month of the previous year

References：The regular report of economy July 2023, from the Embassy of Japan in Chile, Department of Economy.
(The original report is written in Japanese.)
https://www.minsegpres.gob.cl/archivo/noticias/congreso-despacha-el-proyecto-de-royalty