Source: Reuters.com                              Date: 28 July, 2010

Chilean President Sebastian Pinera has vowed to keep working to revamp mining royalties after Congress rejected a government plan to do so. Earlier this month, lawmakers rejected a royalties reform aimed at raising up to USD1 billion to help pay for rebuilding after a massive earthquake in February.

“I hope to be able to find fertile ground for reaching an agreement on the royalty issue, because I feel the mining industry is enjoying an extraordinary boom in prices and profits these days," Mr. Pinera was quoted as saying. The mining sector "has to contribute more to the country's reconstruction and development," the president said.

The opposition rejected his plan to temporarily increase mining royalties, saying such a reform should be permanent. Mr. Pinera described their stance as "incomprehensible." The government had wanted to raise royalties by replacing the current fixed rate for a sliding rate that varies depending on the companies' margins in exchange for extending a tax freeze for eight years.