Mine of possibilities

Wednesday 15 September 2004

Public interest: Taxing mines< Killing two birds with a single law. That is exactly what the Chilean president Ricardo Lagos is up to. A new law proposed by him aims at the creation of a research fund from royalties paid by the mining industry. According to the draft bill submitted by Lagos to Chile's congress, mining companies would be required to pay the government 3 per cent of sales of metallic minerals, and 1 per cent of sales of non-metallic minerals.

The government's key argument is that, at present, private mining companies make free use of non-renewable resources. The new law is meant to compensate the country for the 'loss' of exhaustible natural resources. It is estimated that at least us $100 million can be collected in this way each year, and a portion of this should be invested in a new research fund, the Innovation Fund for Competitiveness. At present only a sorry 0.6 per cent of Chile's gross domestic product is spent on research and development, as compared to an average of 2.8 per cent in developed countries.

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