Jacek Sasin made the declaration at the World Copper Conference in the Chilean capital Santiago on Monday, Polish state news agency PAP reported.
The event is part of a copper industry trade fair, CESCO Week, which brings together the world’s biggest copper producers, according to officials.
On Tuesday, Sasin met with Chile’s Finance Minister Mario Marcel Cullell to discuss Polish investment in Chile’s mining sector, reporters were told.
This includes the Sierra Gorda copper mine majority-owned by Poland's KGHM.
Chile’s finance minister pledges to cut tax for Polish-owned mine
Sasin, who is also the Polish minister of state assets, announced: “Minister Marcel Cullell has assured us that the Chilean government will take our concerns into account and will soon introduce new tax proposals. A limit on taxation will be introduced, especially regarding such companies as the Sierra Gorda mine, where the proportion of copper in the aggregate is small. Taxation will be capped at 50 percent of profit.”
He added it was “a very important declaration.”
Poland’s Ministry of State Assets noted that the Chilean government had originally proposed to raise the mining tax to 3 percent of copper sales.
According to experts, such a measure would adversely affect the entire mining industry.
Now the government in Santiago has softened its stance, proposing a 1 percent tax on copper sales and an additional tax on operating profit, the PAP news agency reported.
Sasin stated: “We are serious about our investment in the Sierra Gorda mine and so I am in talks with the Chilean government to ensure that we work well together and create very good conditions for the growth of this mine.”
Chile’s Cullell "offered assurances that the agreement regarding the Sierra Gorda mine will be upheld and the Chilean government will not introduce any new, unfavourable tax rules until 2029,” according to Polish officials.
Sasin said: “Minister Marcel Cullell assured us that Chile’s new tax bill would take our expectations into account. It seems that after managing to obtain these declarations, Poland’s investments in Chile are currently secured.”
Poland to invest over USD 1 billion in Chilean mine
Sasin, who visited the Sierra Gorda mine on Sunday, told reporters that the Polish government planned to inject “more than USD 1 billion” into the facility to step up copper production, but said "that would require a stable legal and tax framework.”
The Polish deputy prime minister said: “In the face of the challenges related to energy transition, copper is gaining strategic importance. Poland’s KGHM already owns deposits around the world, containing an estimated 40 million tonnes of copper. This gives Poland a significant share in the global market.”
He added that KGHM was “one of Poland’s leading companies,” employing “many people” and generating substantial revenue.
“It is in the interests of Poland and the Polish people that this company grows and generates even more income for the state budget,” Sasin said.
He also told reporters that he was in Santiago because the Chilean government “had proposed tax changes that were unfavourable for KGHM and for the Sierra Gorda mine, which is Poland’s largest overseas investment.”
Sasin said the state-run KGHM company “has drawn up concrete proposals for big investments in the Sierra Gorda mine, worth over USD 1 billion.”
He added: “For these investments to become reality, the authorities must ensure a stable legal and tax environment for the operation of the Sierra Gorda mine.”
Plan to boost output, create new jobs
The Sierra Gorda copper and molybdenum open-pit mine is located in the Atacama desert in northern Chile, the PAP news agency reported.
KGHM plans to increase the mine’s production capacity to 160,000 tonnes a day, further developing the facility and creating new jobs, according to the Polish government.
KGHM bought a 55-percent stake in the Sierra Gorda mine in 2011.
Last year, Australia’s South32 mining company became a minority shareholder in the facility, the PAP news agency reported.
(pm/gs)
Source: PAP, gov.pl
