Chile not planning to cut mining taxes to attract foreign money

Chile is not planning to cut mining taxes to attract foreign investment and Codelco, the world's top copper producer, is not planning output cuts to support a market vital to the local economy, Chile's mining minister said on Tuesday. Chile has set up an agency dedicated to attracting foreign investors as it looks to help a mining industry hit by plunging prices, Aurora Williams said at a mining meeting in London.
But "lowering taxes is not part of our plan," she said, adding the Chilean government would also not consider loosening the country's environmental laws "for any reason whatsoever". Chile has announced plans to make changes to its environmental regulations to reduce uncertainty and encourage investment, but this was mainly being done to improve the turnaround time for mining permit applications, Williams said.
"What we want is that mining permits are granted efficiently. For many of the permits there is no defined time for the government to reply, in other words if a company applies for a permit they don't know when they will get a response." she said. "But this does not mean that we are going to give up on objectives as important as those related to the environment." A number of major projects in Chile have become ensnared in environmental red tape and court cases brought by increasingly active local communities. Barrick Gold's Pascua-Lama mining project, for example, was halted in 2013 after the company had already spent $5 billion, plagued by problems that included wrangling over environmental permits.
As well as proving a costly headache for investors, such delays threaten economic growth, which is still largely reliant on mining. Mining firms globally have been hit hard by a slump in metal prices, mostly due to an economic slowdown in China which accounts for half the world's copper demand. Copper makes up more than half of Chile's exports, leaving it more exposed to China than other Latin American economies. Large mining companies including Glencore have cut production as prices fall towards levels where some operations are no longer economically viable. "What probably will happen in the next few years is that Codelco's copper production will decrease but this is not with the intention to move the market," Williams.