BHP Will Reconsider Its Investment in Chile If Taxes Are Raised

Global miner BHP Billiton (BHP) said it may reconsider its investment plans in Chile if the government raises mining taxes. Chile is the world's largest copper producer.

In a report, Chile's Kurier newspaper quoted BHP billiton as saying the tax increase would leave Chile with a higher tax burden than other major mining nations such as Australia, Canada and neighboring Peru.

BHP said it was closely monitoring Chile's new royalties. If the tax hike materializes, investment plans in Chile will have to be reassessed.

BHP is a major player in Chilean mining, where it operates escondida, the world's largest copper mine.

In April, BHP said it was willing to invest an additional $10 billion in Chile over the next few years, but only if regulatory and financial conditions were right.

Chile's finance minister, Mario O 'Donagh, said: "I don't know. Marcel said raising mining royalties was a top priority for the government and a top goal of the leftist government that won election earlier this year. The government hopes to use the tax revenue to fund social programs.

The proposed tax changes, which also include provisions such as a wealth tax on high earners, aim to raise the equivalent of 4.1 per cent of gross domestic product over four years, of which 0.7 per cent would go to a new minimum-guarantee pension fund.

Other global miners operating in Chile include Glencore, Anglo American, Freeport McMoran and Antofagasta.