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Ley No. 21.591, promulgated 10 August 2023 (Diario Oficial No. 43.624) and effective 1 January 2024, replaces the prior specific mining tax (Impuesto Específico a la Minería, Ley No. 20.026/2005) with a two-layer royalty for large-scale copper producers:
Layer 1 — Ad valorem component (1%): Applied on annual gross copper sales by operators producing ≥50,000 TMCF/year. Unlike the prior income-based regime, this component is independent of operating margins, creating a floor-level fiscal take even when producers are loss-making in income-tax terms.
Layer 2 — RIOMA (operating-margin component): A progressive levy on adjusted taxable mining operating income (Renta Imponible Operacional Minera Ajustada). Rates scale from approximately 8% at low margin levels to 26% at the highest margin band. The exact rate schedule is keyed to the operator's annual copper sales tier (50,000–80,000 TMCF vs >80,000 TMCF) and operating margin percentage.
Combined cap: Total mining-specific tax burden (RIOMA + ad valorem) is capped at 46.5% of adjusted pre-tax taxable mining operating income for producers above 80,000 TMCF, and 45.5% for those in the 50,000–80,000 TMCF band. This cap integrates with corporate income tax so that the aggregate fiscal burden does not mechanically exceed it.
Revenue allocation: One-third of RIOMA proceeds is earmarked to a Regional Productivity and Development Fund (Fondo Regional para la Productividad y el Desarrollo), distributed to the producing region and its communes. The Regional Fund provisions took effect 1 January 2025.
Reporting obligations: Producers subject to the royalty must submit audited annual financial statements to the Comisión para el Mercado Financiero (CMF), introducing a new disclosure layer comparable to listed-company reporting requirements.
The royalty reform was the centrepiece of President Gabriel Boric's fiscal programme for the copper sector, passing after multiple legislative attempts since 2021. The law represents the first structural revision of Chile's mining-specific taxation framework in nearly two decades.
Chokepoint relevance: Chile produces approximately 5.3 million metric tons of copper per year (~27% of global mine supply), making it the single largest national supplier. The royalty re-prices the marginal cost of Chilean copper production and shifts the profit-sharing balance between the state and international mining majors. BHP Escondida (world's largest copper mine, BHP 57.5%), Codelco (state-owned, multiple deposits), Antofagasta Minerals (three Atacama districts), and Anglo American (Los Bronces, Quellaveco Peru) are the primary exposed operators.
Lithium carve-out: The explicit lithium exclusion reflected Chile's parallel state-led lithium strategy (2023-04-20-chile-national-lithium-strategy) under which lithium extraction was earmarked for special state-participation arrangements via Codelco/ENAMI rather than fiscal royalty.
Kast-era restructuring risk: The incoming Kast government's 40-measure economic programme (2026-04-22-chile-national-reconstruction-development-bill) includes provisions to restructure or reduce the RIOMA progressive component, citing copper-investment competitiveness concerns. As of early 2026 this bill remains in legislative process; Ley No. 21.591 is still the operative regime.
bill would shift Chilean copper's long-run supply curve downward, affecting LME price formation.
Escondida alone (~1.1 Mt/year) generates material RIOMA exposure at typical margin levels.
progressively more production enters the new regime through the late 2020s.
fiscal interest in maintaining royalty revenue, complicating future rollback.
succeed in amending the RIOMA progressive rates, and if so, at what level?
obligations?
to a broader state-participation framework that absorbs the royalty carve-out?