300 communes throughout the country received monetary contributions from the mining industry during the first quarter of 2024. The Mining Royalty Law, approved in 2023, established the distribution of part of the collection of copper money to regional governments and municipalities.
These monies will be delivered from 2025 to three different funds. Specifically, the Regional Fund for Productivity and Development (FRPD), the Mining Communes Fund (FCMI) and the Support Fund for Territorial Equity (FET).
However, in accordance with the Budget Law, this year it was decided advance part of the resources that will be distributed from 2025. According to a Horizontal report on the destination of Royalty resources during the 1st quarter 2024, The three most benefited communities are Puente Alto, Calama and Maipú, with $3,221 million, $2,164 million and $1,670 million respectively.
Mining Royalty contributions to communes
“In the 2024 Budget Law, a unique and extraordinary contribution of $70.755 million (USD 79 MM) to the Municipal Common Fund (FCM) which must be distributed among the communes most dependent on the FCM (at least 50% dependence) or that belong to the group with the least own income at the national level (below the 80th percentile)” , indicates the aforementioned report.
“They were also distributed USD 25 million that the FCMI advances in 43 mining communities, which will receive in Chilean pesos an average of $532,418,604 (median $411,565,100),” he adds.
Of course, although the FCMI resources are freely available, it should be noted that You cannot pay municipal debts with them. You can review the following table with the communes with the highest contributions due to the FET and FCMI advances in 2024.
The report also indicates which municipalities received the most money. per capita for the distribution of the mining Royalty. When reviewing this case, they highlight Ollagüe ($1,277,552), followed with a wide difference by Río Verde ($576,435) and Laguna Blanca ($476,552).
The following graph also details how they were distributed regionally the resources assigned to the first quarter of 2024. In total, $93,668 million pesos (USD 104 million) were delivered, where 17% has been assigned to the Metropolitan region, followed by the Valparaíso region (12%) and O’Higgins (10%).
“Three funds have been created and a significant amount of resources have been freely available and the law establishes the obligation to report these resources. This oversight mechanism is an innovation and it will be interesting to see its effectiveness,” Soledad Hormázabal highlighted to El Mercurio.
Mining Royalty contributions to regional governments
“Additionally, USD 20 million have been delivered to the Regional Governments, via FRPD. These resources have been fundamentally transferred to Universities and public institutions such as INDAP (USD 4.8 MM), CORFO (USD 3.4 MM), FOSIS (US 2.7 MM) and the University of O’Higgins (US 1.2 MM), to finance a total of 72 projects. 50% of these resources have been received by the O’Higgins region (USD 10 MM)”, Horizontal indicates.
You can find the detail in the graph below.
The executive director of Horizontal, Juan Obach, indicated to the aforementioned media that “special focus should be placed on creating accountability mechanisms for FRPD projects, and evaluating whether they are creating real productive value in the regions.”
You can review Horizontal’s full report by clicking here.
