{"id":1127546,"date":"2019-07-18T13:54:03","date_gmt":"2019-07-18T18:54:03","guid":{"rendered":"https:\/\/www.mining.com\/?p=997003"},"modified":"2019-07-18T13:54:03","modified_gmt":"2019-07-18T18:54:03","slug":"chile-a-step-closer-to-scrapping-copper-funding-for-military","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1127546","title":{"rendered":"Chile a step closer to scrapping copper funding for military"},"content":{"rendered":"<p>Chilean lawmakers have unanimously approved changes to&nbsp;a<br \/>\nlaw that forces state-own Codelco, the world\u2019s largest copper producer, to<br \/>\ntransfer 10% of its annual export sales to the country\u2019s armed forces.<\/p>\n<div class='d-flex justify-content-center'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>The ruling, known as Ley Reservada del Cobre (Restricted Law<br \/>\non Copper), has been on the books since 1958 and was strengthened during the<br \/>\n1973-90 military dictatorship of Augusto Pinochet.<\/p>\n<p>The minimum contribution expected is $180 million a year,<br \/>\nthough in periods with high copper prices, such as during the super cycle at<br \/>\nthe start of the decade, it increases to nearly $1 billion.<\/p>\n<p>The funding has transformed Chile&#8217;s armed forces into one of<br \/>\nthe most capable in the region, with equipment far superior to any other neighbouring<br \/>\ncountry.<\/p>\n<p>The decades-old law has limited the amount of funds Codelco has available for reinvestment at a time when is in the midst of a <a href=\"https:\/\/www.mining.com\/codelcos-new-ceo-to-lead-the-copper-miners-25-billion-revamp-22101\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">$39-billion,10-year overhaul<\/a> of its aging mines.<\/p>\n<p>It has also been an obstacle for the copper giant to invest<br \/>\nin foreign projects or form joint ventures in other countries, as other<br \/>\ngovernments are not keen on the idea of indirectly help finance the armed<br \/>\nforces of a regional competitor.<\/p>\n<p>Defence minister Alberto Espina <a href=\"http:\/\/www.mch.cl\/2019\/07\/18\/senado-aprobo-proyecto-para-derogar-la-ley-reservada-del-cobre\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">told Soy Chile<\/a> that the \u201chistorical change\u201d, which has yet to be approved by the lower chamber of parliament, would increase the transparency of military financing.<\/p>\n<p>According to&nbsp;<a href=\"http:\/\/www.dipres.gob.cl\/595\/w3-propertyname-557.html\"  rel=\"noreferrer noopener\">official<br \/>\ndata<\/a>, in the past 17 years Codelco has injected about $13.7 billion into<br \/>\nthe country\u2019s armed forces coffers.<\/p>\n<p>Two previous governments have tried and failed to eliminate<br \/>\nthe controversial law, but Sebasti\u00e1n Pi\u00f1era\u2019s administration is confident this<br \/>\ntime the modifications will be approved.&nbsp;<\/p>\n<p>The copper giant holds vast deposits of the red metal,<br \/>\naccounting for over 10% of the world\u2019s known proven and probable reserves and<br \/>\nabout 11% of the global annual copper output with 1.8 million tonnes of<br \/>\nproduction.<\/p>\n<p>Production decline, together with lower copper prices and<br \/>\nhigher costs, saw Codelco\u2019s annual profits drop by a third last year to $2<br \/>\nbillion, not counting paper losses worth almost $400 million, as it wrote down<br \/>\nthe value of its assets, including its Ventanas smelter and the open pit at its<br \/>\nSalvador division.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Government is seeking to free mining giant Codelco from a decades-old tax used to fund the country&rsquo;s armed forces.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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