Revista Nueva Minería

According to figures from the Catholic University scholar, Gustavo Lagos, private mining companies will pay taxes on more than $ 4 billion, a similar figure to the one of 2012, by a strong increase in production. While Codelco’s state company will delivered to the Treasury about U.S. $ 3,700 million

Is likely that this 2013, for the second consecutive year, the private mining’s contribution is greater than the Codelco’s.

According to scholar Mining Center of the Catholic University, Gustavo Lagos, in 2013 this firm will delivered to the state about US$3.700 million, figure confirmed by the Company and which is lower than the US$ 5.200 million estimated by the Budget Management Office (Dipres). Meanwhile he says, this year private mining will delivered about US$4.200 million in respect of income tax and royalty, a similar figure to the one of 2012, but superior to the one contemplated in 2013 Budget, of about US$ 3.006 million. “Government was not optimistic. There will be downward impact, because production will be much higher and that will offset the decline in copper prices, “said Lagos.

In 2012, considering the extraordinary contribution made by Anglo American by way of tax due to Codelco’s operation to buy part of Los Bronces site, private minings contributed with US$4.160 million, versus US$4.035 million from Codelco (see graphics). Thus, this will be the second year in which the sector will pay more taxes than the one the state company will delivered to the Treasury, a vision that matches the Cesco’s Executive Director, Juan Carlos Guajardo. “It is very likely”, he says.

However, the Dipres argues that there will be a low as the basis for comparison with 2012 is very high. According to his vision, there will be a “expected decline of income taxes paid by large private mining of 26.3% real, which is explained by the effects of lower annual return, associated with the single tax payment made by a taxpayer (Anglo American) in 2012 which will not be repeated in 2013”, says the Public Finances Report. Other factors are the lower copper prices expected for 2013.-which affects PPM (Monthly Interim Payment)- and additional tax revenues, “although it is expected for next year a higher percentage of remittances.”

Reasons

According to Lagos, private mining will delivered more to the treasury because of productive rebound it is s experiencing. In 2013, it is calculated that it will increase its volumes between 300 and 400 thousand additional tons of copper. “This effect would offset in part the fall that copper price is facing and would also imply a fall although slight of industry’s costs. It is also supported by the improved performance of the dollar, he explains.”Increased production partially offset the decrease in revenue as a result of lower prices,” says Guajardo. José Tomás Morel, research manager of the Mining Council, agrees. “There is a rising trend in copper production in Chile, projected by Cochilco at around 2% this year. The latest figures reported by private companies seem to confirm this increase, “he says.

The official figure suggests that copper production will reach 5.53 million tons this year, about 98 000 tons by 2012. In accordance to Lagos this figure is higher. According to his vision, volume will increase 7,4%, from 5,433 million tons to 5,835 million tons of copper.

Escondida, explains, will head with a production that will border 1,19 million tons, this means, near 115.000 additional tons. Same will happen in Collahuasi, last year reduced its production in 38% by management problems and lower grade. In this case, the Joint Venrure between Glencore Xstrata and Anglo American will reach 320.000 tons, versus the 245.000 tons from 2012.

Juan Carlos Guajardo have same estimates. “Major recoveries will be given by Escondida. There are also management improvements and the Collahuasi expansion’s start and increased production of ongoing projects such as Esperanza and Anglo Sur, he says.

Review

The 2014 Budget debate will begin in a few weeks and some days ago, the Dipres’s main executive, Rossana Costa, said that “the copper price will be reviewed in July” and the final projection of transfers will be released. Government sources indicate that there may also be an upward adjustment in the private world figures. However in Sonami, they estimate that large minings will make a contribution of US$3.400 million this year. “The price fall will be greater than the increased production,particularly in case of copper. Add to that the rates of specific mining tax fall to 4% or 5%, the original levels set in 2005. adds In some mining companies it is added the increase of costs, “says the manager of the Guild Studies, Alvaro Merino.

Morel from the Mining Counsil, assure that it is yet difficult to estimate the amount that the State will raise this year, among other reasons, because one of the factor is still uncertain has to deal with costs. “”While last year showed some stability promptly compared to 2011, in the last decade there has been a sharp rise that makes difficult to estimate the 2013 annual costs, “he says.

In case of Codelco, Lagos believe that the fall in its contribution to the Treasury is that the state company will not raise its own production this year, therefore it will remain 1,64 million tons as well as in 2012. Together with this is the fall in copper price. Friday the metal closed the day at US$ 3,13 per pound, a slight increase of 0,94% if we compare with Thursday (US$3,10). Regarding the end of 2012, there is an accumulated fall of 12.6%.

Source: La Tercera