Business
Voluntarily accepts changes t
Voluntarily accepts changes t.
About this update from Antofagasta Plc
[{"type":"text","content":"\n RNS Number : 3627Z Antofagasta PLC 12 January 2011 \n \n\n \n \nAntofagasta plc\n \n \nAntofagasta's mining companies voluntarily accept changes to the Chilean mining tax\n \nLondon, 12 January, 2011\n \nAntofagasta plc (\"Antofagasta\") (LSE: ANTO.L) announces that its four mining companies, Los Pelambres, Esperanza, El Tesoro and Michilla, have voluntarily elected to accept amendments to the Chilean mining tax (royalty) as permitted pursuant to a law enacted in Chile on 21 October 2010. This law was introduced by the Chilean Government in order to contribute to the financing of overall reconstruction costs following the severe earthquake which affected the country on 27 February 2010.\n \nThe four mining companies of the Antofagasta group (the \"Group\") currently have tax stability agreements which set the rate of the mining tax at 4% of operating profit until 2017 in the case of Los Pelambres, the El Tesoro central open pit and Michilla and at 5% of operating profit until 2023 in the case of Esperanza. \n \nUnder the law enacted on 21 October 2010, a company with a tax stability agreement may voluntarily elect to waive its tax stability for the three-year period of 2010 to 2012 during which it will then be subject to mining tax on its operating profits at a sliding scale rate of 4% to 9%, based on its operating profits as a percentage of its turnover; after 2012 its mining tax percentage will revert to the rate set out in its existing stability agreement until the expiry of that agreement. In exchange for this voluntary waiver, the company will be granted an additional stability period of six years after the end of its existing stability agreement during which it will be subject to a mining tax on its operating profits at a sliding scale rate of 5% to 14% (again based on its operating profits as a percentage of its turnover).\n \nCompanies and operations which do not have stability agreements are subject to a sliding scale rate of 5% to 14% from 2010 compared with a previous rate of 5%.\n \nAs Antofagasta has previously announced, a temporary two-year increase in the corporate tax rate in Chile (known as \"first category tax\") from 17% in 2010 to 20% in 2011 and 18.5% in 2012 was enacted on 31 July 2010; the Group also incurs withholding taxes on a...