Report commissioned by the Mining Council from the consulting firm Plusmining.
The report highlights that, thanks to the institutional framework, under-declarations have been avoided in mineral exports and highlights the country’s position at the continental level.
In the midst of the discussion about the mining royalty project that has already been approved by the Chamber of Deputies and is being studied by the Senate, the Mining Council commissioned a study from the consulting firm Plusmining, to verify the situation of the mining industry regarding transparency and oversight of the activity, in a document that addresses from tax to regulatory aspects. At a general level, among the main conclusions of the study, it was found that there is limited information regarding the performance of state institutions in terms of monitoring the mining industry, with Cochilco and Sernageomin being exceptions as they have more public records.
Along these lines, the report explains that this does not occur in the National Customs Service, Internal Revenue Service and in the Financial Market Commission, a situation that could give rise to arguments against the mining industry, as a result of the little information availability. “The main issue is coordination: the mining issue is well specialized, in our institutional framework there are different agencies that have the responsibility of looking at the different aspects, but greater coordination between them is needed for the process to be complete. There is also a lot of ignorance of how this business is carried out in the commercial part, an issue that is unfortunately not well understood, which causes problems ”, says Juan Carlos Guajardo, executive director of Plusmining.
Regarding the control of exports and declaration of the value of sales, it is noted that the Chilean system in which Cochilco controls commercial conditions and Customs physical and chemical quality has resulted in an adequate collection of mining taxes relevant to the country, without discourage the export of minerals. “Copper exports in Chile are adequately controlled so that they are carried out under market conditions, which is reflected by studies that confirm low levels of underreporting of sales”, they assure.
As detailed in the study, as a result of the supervisory role of Cochilco and Customs in the last 10 years, it has been found that the under-declarations of export value of concentrates have remained limited, showing that mining companies in Chile are subject to a framework that minimizes the chances of doing so. And, for example, something that is not well known is that when entering into a contract, both parties define the representation of an international laboratory in which the conditions of the transaction are verified, and the definition of a third party in in case there are differences, as well as the laboratory that has Customs.
“This is based on a balancing system between the interests of the buyer and seller. Chile has an internationally recognized contract management system; it is systematized, unlike other countries, which gives peace of mind to investment, ”says Guajardo. Along these lines, the report assures that, in general, Chile is located in intermediate positions between developed and emerging countries, in terms of governance indices, regulatory quality and attractiveness for mining businesses, leading at the continental level, but losing political stability. and regulatory in recent years.
Source: El Mercurio