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The wealth gifted to the large-scale copper mining industry in Chile: new estimates, 2005-2014

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This article estimates the economic rents received by the 10 mines that comprise Chile’s large-scale private-sector copper-mining industry. The methodology used produces a conservative calculation and includes two corrections that have hitherto been ignored in the literature: the reimbursement of exploration expenses and the compensation needed for volatility in the copper price. Estimates show that the wealth transferred to these firms between 2005 and 2014 was at least US$ 114 billion. These rents are neutral in terms of investment and production decisions; in other words, if the private mining companies had paid the Chilean Treasury the calculated amount, their total investment and output would have been unchanged, but the country at large could have benefited from the huge voluminous resources in question. Moreover, in the absence of any other distortion, the firms would still have earned returns equivalent to what they would have obtained under perfect competition.

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  • -, 2018. "The wealth gifted to the large-scale copper mining industry in Chile: new estimates, 2005-2014," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    • Handle: RePEc:ecr:col070:43953
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    1. -, 2018. "CEPAL Review no. 124," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    2. Felipe Correa Mautz, 2016. "¿Perdimos la oportunidad con el cobre?," Documentos de Trabajo 1, Estudios Nueva Economía.
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    1. Emilio Castillo, 2020. "Mineral Exploration and the Discovery of New Deposits," Working Papers 2020-06, Colorado School of Mines, Division of Economics and Business.
    2. Castillo, Emilio, 2021. "The impacts of profit-based royalties on early-stage mineral exploration," Resources Policy, Elsevier, vol. 73(C).

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