Chilean mining industry warns that new fuel tax will threaten competitiveness

The top mining body in the world's biggest copper producer has warned that a temporary tax adjustment on Diesel?driven by Chilean government?to mitigate increasing fuel prices?will hit the mining sector?s competitiveness.

* The measure by the government reduces recovery of a diesel tax specific to certain companies in order to finance mitigation measures, without increasing fiscal spending. Chile's Mining Council - whose members include the state-owned company Codelco and international miners BHP Glencore Freeport-McMoRan Anglo American - said that?the industry would pay around $100 million within six months in relation to this modification. * According to the association, the mining sector will be responsible for 74% of total costs of the measure. This is based on an estimated $135 million in government revenue. In a press release, the group stated that modifying a tax in order to selectively burden strategic sectors is unfair and will negatively impact their competitiveness. Chile's mining industry is plagued by?high operating costs and excessive permit bureaucracy.

CONTEXT * On Monday, the Chilean government activated a fuel stabilization clause to quickly align with surging international prices. * In order to offset the rising price of gasoline and diesel, the Chilean government, which is one of Latin America's biggest oil importers due to the lack of domestic production, has frozen public transport fares, and reduced the price of Kerosene.

(source: Reuters)