Chile to Change Mining Royalty Rates

Chile is to make royalty changes in the mining industry, however Mining Minister Laurence Golborne dismissed fears that overseas investments would be affected. He said that the planned changes would not punish investment.

The lower house of Chile has approved the government proposal to raise royalties paid by mining companies on October 13, 2010. The increased royalties would be to the tune of $ 1 billion over a three year period.

This will help fund earthquake reconstruction activities along with educational and health programs that President Sebastian Pinera is keen to see go through. Companies like BHP Billiton and Freeport - McMoRan Copper and Gold Inc would be affected by the changes.

Chile is the world's largest copper producer and the local mining unions are worried that such high royalties would make Chile unattractive to global investors. There have been strikes and protests by mining workers nationwide.