Chile to avoid Australian mine tax

SWEEPING proposals on a mine tax, like those being planned in Australia, aren't likely to ever be seen in Chile, a top miner says.

SWEEPING proposals to change minerals laws, like those being proposed in Australia, aren't likely to ever be seen in Chile, the chairman of Antofagasta says.

Jean Paul Luksic told HSBC's Chile Day conference in London that the vast majority of miners active in Chile had a contract with the state, and were also supported by the Foreign Investment Agreement, which regulated the fiscal regime.

"What I think is key to the success in Chile investment is that these contracts have been respected. Of course, those taxes can be subject to certain changes but miners have to sign contracts with new changes incorporated -- it's not that easy to change the overall tax system, which is different to what we've seen in Australia," Mr Luksic said.

"There is always an element of resource nationalism in the mining industry but at the end of the day, stable countries respect the laws and their investors, and less stable countries sometimes make changes that don't help them much in the long-term."

Australia's mining regime has been the focus of attention since the government said it planned to amend the law to gain a bigger portion of the windfall revenue being produced by mining companies amid rising commodity prices. Earlier this month, the government released a draft of the legislation that proposes a 30 per cent tax on profits from iron ore and coal producers.

Critics have said it risks curtailing foreign investment, while some politicians have called for the level of tax to be higher. The tax, set to come into effect from July 2012, won't apply to companies with a profit of $50 million or less.

Chile is the world's largest copper producing nation and home to the world's biggest copper producer, state-owned Codelco.