Chile's Tarapacá Proposes Advance of Mining Tax Funds to Rebuild the North

en.Wedoany.com Reported - On August 27, José Miguel Carvajal, Governor of Chile's Tarapacá Region, proposed at the 2026 SONAMI Mining Summit that the central government establish a special mechanism to disburse in advance funds from future mining royalty transfers destined for disaster-affected areas, or allocate an equivalent amount of special funding, for the recovery of critical infrastructure and climate adaptation works in northern Chile following recent heavy rainfall. The proposal targets northern regions designated as disaster zones and does not involve increasing current tax burdens on mining companies or creating new mining taxes.

Carvajal stated that the advanced funds should be allocated to a prioritized list of recovery projects, with a focus on the transport connection between Iquique and Alto Hospicio, coastal areas, ports, and major logistics corridors. Among these, the A-16 and A-504 highways have been designated as priority projects. The repair and upgrade of A-16 still involves the existing responsibilities of Chile's Ministry of Public Works and concessionaires, with local funds intended to supplement related project investments. Carvajal indicated that the budget required to make damaged roads more resilient to future rainfall could reach six to seven times the current repair funding needs.

In Chile's 2026 budget, Tarapacá receives 10.956 billion Chilean pesos through the Regional Productivity and Development Fund under mining royalties. During the same period, the corresponding allocations for Antofagasta, Atacama, and Coquimbo are 14.257 billion, 11.027 billion, and 13.639 billion Chilean pesos, respectively. Under the current mining royalty system, related revenues are also distributed to regions through the Regional Productivity and Development Fund, the Territorial Equity Support Fund, and the Mining Municipalities Fund, with approximately US$450 million expected to be allocated to regions and municipalities once the system reaches a steady state.

At the mining summit, Miguel Vargas, Governor of the Atacama Region, separately proposed activating the Northern Macro-Regional Infrastructure Fund planned during the mining royalty legislative process, and requested that SONAMI promote the relevant arrangements with the central government. The fund is intended for disaster mitigation, infrastructure works, and post-disaster reconstruction in the northern regions.

Prior to this proposal, Tarapacá had already drawn on local budgets to respond to the disaster. On August 25, the Tarapacá Regional Council approved the reallocation of 1.510 billion Chilean pesos from the National Regional Development Fund for recovery projects in areas affected by heavy rainfall, covering education and healthcare facilities, public buildings, urban and rural roads, meteorological monitoring equipment, and emergency assistance for agriculture, livestock, and fisheries. Relevant authorities have also proposed the construction of 12 meteorological stations, with a budget exceeding 400 million Chilean pesos.