A Note in Defense of the Mining Law
By José Piñera
Some years ago, the magazine Business Week expressed in this way the pioneering role of Chile in mining:
"Emerging market politicians have taken their cues from Chile, where the global mining rush got its start in the 1980s. Chile became the first mineral-rich developing country to liberalize its mining laws to attract foreign investment. Since then, mining has become the locomotive of Chile's renaissance....The Chilean experience has since been copied by most Latin nations" (May 19, 1997).
Despite the enormous mining success of Chile in the last two decades, the governing Concertacion alliance introduced in Congress a bill to change the Constitutional Mining Law (Law 18.097), approved in 1981. For the first time since Marxist President Allende confiscated in 1971 the mining operations of the so called "Gran Minería del Cobre" (GMC), property rights could be weakened again in this key sector of the Chilean economy.
La Concertacion (and two renegade RN deputies) proposes to add an article 13 bis to Law 18.097 introducing a discriminatory sectorial tax. In other words, the parties of the Concertacion are in favor of changing a Constitutional Law in order to partially confiscate those companies (domestic and foreign) "guilty" of investing 20 billion dollares in exploring and developing Chilean mines.
A friendly suggestion to President Lagos: raise to reasonable levels the "patente minera" contemplated in the Constitutional Mining Law, close some tax loopholes, withdraw this bill from Congress, abolish the redundant Ministry of Mining, and move on toward consolidating the incipient, and fragile, economic recovery.