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In Mendoza they understand that raising mining royalties is scaring away future investments.
Therefore, even when the project is added to the half-sanction of Senators, and even if Deputies give it final approval, in the province they will maintain the current percentage of royalties charged, which is 3%.
“The mining resource belongs to the provinces and it is the provinces that define the percentage of that tax. That is why our position will be maintain the current 3%because also the initiative being discussed in Congress says up to 5%, which is a maximum limit to which this tax can rise,” Latorre confirmed.
He also clarified that in Mendoza this tax is levied on the income obtained by the mining companies, and not on what they obtain at the mine mouth. “We made that decision because we understand that we must levy a tax on what the mine obtains as profit, and not on the gross that is obtained in the mine, because that way the tax would be much more burdensome,” said the official. from Cornejo.
So dissatisfied are Mendoza with this possible increase, that they are already considering taking their rejection to the Copper Table, that political space that already makes up the provinces of San Juan, Salta and Catamarca.
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The governor of San Juan asked to “respect what was agreed”
The project to increase mining royalties was barely known, one of the first governors to reject it He was the neighboring president of San Juan, Marcelo Orrego, who understood that endorsing this increase is changing the rules of the game for current mining investments that are already working on mining explorations in that province.
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The governor of San Juan, Marcelo Orrego, agreed with Latorre and rejected the possible increase in mining royalties.
““You have to respect what was agreed”said in response to the proposal to modify the mining royalty ceiling and at the same time confirmed that the current values will also be maintained in his province.
“The modification places a cap of 5%. A limit does not mean that one is 5%, you can set 3% and respect the 3%. What I believe and am convinced is that we must always respect what has been agreed upon,” said Orrego.
The possible increase in royalties ignited the mining chambers
Days ago the president of the Argentine Chamber of Mining Companies CAEM, Roberto Cacciola, participated in the streaming of Floyd Tv online “Explore with Science“, and there he not only marked the rejection of the mining companies to this potential increase in royalties, but also explained how it would discourage future investments that could prioritize going to other countries.
“We have a project in the tax package where we intend to increase the royalty. So, there is a contradiction between the Bases Law and the new fiscal package where an increase in royalties has been included that threatens the possibility of the RIGI being effective,” said Cacciola.
Along these lines, he observed that if this tax went from 3 to 5% “it would have a very, very bad, very bad impact, because it would discourage investments and would be another factor of distrust,” he considered. And he clarified that if there was something essential “it is the need for the Mining Investment Law to be fully respected.” “And this is a key factor in further losing the little confidence there is in Argentina,” he added.
Among his arguments for rejecting the project, he recalled a main aspect in the industry: Argentine competitiveness. “We compete against other countries, we compete against the possibility of them investing in Chile, Peru, Canada, Australia. And all of these territories, basically, have their tax system based on taxation on income and not on production or sales. Because that means that even if you lose money you have to pay taxes.”
