Since 2024, Chilean mining has operated under a new tax regime, which introduced an ad valorem component and adjusted profitability brackets.
By Juan Carlos Guajardo
Today, we can begin to draw some initial conclusions. At first glance, the numbers appear striking: in 2024, the effective tax burden on major operations rose by more than 5%, from 39% to 44.3%, according to estimates by Plusmining.
Analyzing the impact of this situation is no easy task. The vast majority of current mining investments in Chile are brownfield—that is, expansions or improvements of existing operations. These types of projects have little room for postponement if operational efficiency, labor contracts, and productive commitments are to be maintained. In this sense, the royalty does not necessarily halt investments, but it may affect their scale, pace, or depth.
In contrast, greenfield projects are unfortunately very scarce, which makes it even harder to measure the potential inhibitory effect of the new royalty. And globally, the lack of new copper projects has created a paradox: although Chile has become more expensive and complex, it remains relevant due to its installed base, geology, and experience.
But that doesn’t mean we can afford to be complacent. The competition doesn’t wait. Even countries with no mining tradition but with previously untapped potential, like Argentina, are drawing attention thanks to friendlier policies and fewer regulatory barriers. In a market where every ton of copper is vital for the energy transition, mining investment will flow where it finds favorable and predictable conditions.
From another perspective, it is crucial to acknowledge what is happening in Chile: mining has significantly increased its contribution to public revenue. In 2025, according to data from the Internal Revenue Service, tax revenues from the mining sector reached 19.077 billion dollars, a 22.7% increase compared to the previous year. The royalty accounts for more than 11% of that revenue.
This resource flow is positive, but caution must be taken not to fall into the trap of thinking mining is an inexhaustible cash cow. International experience shows that overburdening the sector can have adverse effects: loss of competitiveness, asset aging, reduced exploration, and brain drain. Collecting more should not come at the expense of sound operational decision- making.
A particularly innovative feature of the new tax framework is that part of the revenue goes directly to municipalities and regional governments. This may be one of the greatest historical opportunities for mining and the territories. But merely transferring funds is not enough: there must be local management capacity, planning, civic participation, and oversight mechanisms to ensure transparent and strategic use of the resources.
In summary, the Chilean royalty is already having effects. It hasn’t paralyzed mining, but it has raised the bar by establishing a total tax burden above the average of its mining competitors.
Chile must manage this new balance wisely: raise revenue without suffocating the sector, invest
without waste, and distribute without losing focus. Mining has taken a major step by contributing
more to the country. Now it is up to the State—at all levels—to prove worthy of that trust and
demonstrate that there is shared responsibility among all stakeholders.
Source: El Mercurio