TIDMANTO
RNS Number : 4651E
Antofagasta PLC
30 June 2023
NEWS RELEASE, 30 JUNE 2023
REPORT ON PAYMENTS TO GOVERNMENTS
Antofagasta plc CEO, Iván Arriagada said:
"I am pleased to issue today Antofagasta plc's 2022 Report on
Payments to Governments. The report sets out the taxes and other
specified payments to governments relating to mining activities
which were paid during 2022 by the Company and its
subsidiaries.
"All of our operating mines are located in Chile and this is
where 99.5% of these taxes and other payments to governments were
paid during the year."
A copy of the report can be found below and on the Company's
website at
http://www.antofagasta.co.uk/investors/reports-presentations/ .
Investors Media -
- London London
Rosario Orchard rorchard@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Robert Simmons rsimmons@antofagasta.co.uk Telephone +44 20 7404 5959
Telephone +44 20 7808 0988
Media -
Santiago
Pablo Orozco porozco@aminerals.cl
C arolina cpica@aminerals.cl
Pica
Telephone +56 2 2798 7000
----------------- --------------------------- ------------- -------------------------------
2022 REPORT ON PAYMENTS TO GOVERNMENTS
INTRODUCTION
This report details payments to governments made by Antofagasta
plc and its subsidiary undertakings ("Antofagasta" or "the Group")
relating to activities involving the exploration, discovery,
development and extraction of minerals, for the year ended 31
December 2022. This report has been prepared in accordance with the
requirements of the UK's Report on Payments to Governments
Regulations 2014 (as amended in December 2015) ("the Regulations"),
which enacted EU Accounting Directive 2013/34/EU, as well as the
related requirements set out in the Disclosure and Transparency
Rules of the UK's Financial Conduct Authority.
ANTOFAGASTA PLC
Antofagasta is a Chile-based copper mining group. The Group
currently operates four copper mines in Chile, and has a
significant portfolio of growth opportunities located predominantly
in Chile and in the United States. Mining is the Group's core
business and in 2022 represented over 95% of Group revenue and
EBITDA. The balance of the Group's revenue and earnings are
generated by its transport division, which is also in Chile.
Three of Antofagasta plc's subsidiary undertakings operate
copper mines in Chile - Los Pelambres (60% owned by the Group and
40% by Non-Controlling Interests), Centinela (70% owned by the
Group and 30% by Non-Controlling Interests) and Antucoya (70% owned
by the Group and 30% by Non-Controlling Interests). Antofagasta
also holds a 50% stake in the Zaldívar mine in Chile and is the
operator of the mine. Zaldívar is accounted for as a joint venture
by the Group. Each of the Group's individual mining operations are
therefore held within separate Chilean legal entities.
Antofagasta Minerals S.A. is the Group's mining corporate
centre, and also undertakes certain exploration and development
activities. Other Group subsidiary legal entities hold investments
in the Group's mining operations, mining properties, infrastructure
required for the mining operations and cash generated by the mining
operations, and therefore incur tax and fee payments (or refunds)
relevant to this report.
The Group's principal activity outside of Chile is the Twin
Metals project (100% owned by the Group) which is a copper, nickel
and platinum group metals (PGM) underground mining project located
in north-eastern Minnesota in the United States.
The parent company Antofagasta plc is registered in the UK and
conducts no direct exploration or mining activities.
All of the revenues and operating costs of the Group's mining
operations, and the large majority of the mining division's
corporate costs, are therefore recorded by Group legal entities
within the same tax jurisdiction, namely Chile.
BASIS OF PREPARATION
Scope of report
Disclosure of payments to governments is required in respect of
payments arising from the exploration, discovery, development and
extraction of minerals; the payments included within this report
therefore relate only to Antofagasta's mining activities, and
exclude payments made by its transport division.
Groups are required to prepare a consolidated report disclosing
payments made by the parent company and its subsidiary
undertakings. Accordingly, this report reflects payments made by
the Group companies conducting mining and exploration activities,
or holding investments in the Group's mining operations, mining
properties, infrastructure required for the mining operations and
cash generated by the mining operations (Los Pelambres, Centinela,
Antucoya, Antofagasta Minerals S.A., Inversiones Los Pelambres
Ltda., Michilla Costa and Minera Pampa Fénix SCM), and excludes
payments made by the Zaldívar joint venture. The amounts reflect
100% of the payments made by the subsidiary companies - i.e. not
just the Group's proportionate share where the Group does not own
100% of the subsidiary undertaking.
Payments
The payments disclosed in this report are on a cash basis.
Chilean corporate tax payments on account made during a year are
typically based on the prior year's taxable profit, and therefore
the tax cash payments are likely to differ from the current tax
charge reflected in the Group's income statement. Any cash refunds
for excess payments made in the previous year are offset against
current year payments, and if the refunds exceed the payments the
net refund is shown as a negative amount in this report.
The payments made to governments are required to be analysed
into the following categories:
-- Production entitlements
-- Taxes - taxes levied on the production or profits of
companies, excluding taxes levied on consumption, value added
taxes, personal income taxes, sales taxes, property taxes or
municipal charges.
For general purposes, the total tax rate in Chile is 35%, which
comprises a standard corporate ("first category") tax which is
payable as profits are earned (current tax rate of 27%) and a
withholding tax payable when those profits are distributed out of
Chile (total tax rate of 35% less the first category tax already
paid). So typically withholding tax of 8% will be paid when profits
are distributed out of Chile, reflecting the 35% total tax rate
less the 27% first category tax rate already paid. During 2022,
some of our companies utilized the "ISFUT" benefit, which
corresponds to a substitute tax of 30% on profits earned in the
taxable profits fund. This resulted in a temporary reduction in the
typical withholding rate (applicable between 2020 and April 2022),
so the withholding payment was effectively calculated at a total
tax rate of 30%, instead of the normal rate of 35%.
The withholding tax therefore effectively represents a deferred
tax on the profits generated by the operating companies, payable
when those profits are distributed out of Chile, and forms part of
the total 35% tax rate. The withholding tax paid in respect of
amounts distributed by the operating companies to the Group
companies which hold the Group's interests in the operating
companies is therefore included within this report as part of the
taxes levied on the income or profits generated by the Group's
mining activities. Withholding tax paid in respect of amounts
distributed by the operating companies to the external companies
which hold the Non-Controlling Interests in the operating companies
is excluded from this analysis, as it does not reflect part of the
tax charge borne by the Group's subsidiaries, but rather is a tax
charge borne by those external companies.
In addition to first category and withholding tax, there is also
a Chilean mining "royalty" tax, which is calculated as a percentage
of taxable operating profit for mining operations, and accordingly
is a profits-based tax which is therefore included within this
report as part of the total "taxes" paid.
The "taxes" reflected in this report in respect of the amounts
levied on the profits generated by the Group's mining activities in
Chile therefore comprise corporate ("first category") tax,
withholding tax paid in respect of amounts distributed by the
operating companies to the Group companies which hold the Group's
interests in the operating companies, and the mining "royalty"
tax.
-- Royalties - typically amounts levied based on production
levels or revenues. As noted above, the Chilean mining "royalty"
tax is a profits-based tax rather than a production or
revenue-based royalty.
-- Dividends
-- Bonuses - signature, discovery and production bonuses.
-- Fees - licence fees, rental fees, entry fees and other
considerations for mining licences or concessions.
-- Infrastructure improvements - payments to governments for the
construction of major public infrastructure such as highways,
railways, bridges and port facilities. Payments which form part of
the Group's social investment activities, for example contributions
in respect of local schools, health care or community facilities,
or improvements to the general environment of local communities,
such as improvements to local roads and public spaces, are
excluded.
Government
"Government" means any national, regional or local authority of
a country, and includes a department, agency or undertaking that is
a subsidiary undertaking where the authority is the parent
undertaking.
Materiality
Under the Regulations a payment need not be disclosed if it is a
single payment of less than the equivalent of GBP86,000
(EUR100,000) or a series of related payments in a single year whose
total is less than the equivalent of GBP86,000. In general this de
minimis materiality level has been applied when preparing this
report, although in some circumstances payments below this
threshold have been voluntarily included.
Analysis by project / entity
An analysis of payments by project is required where payments
are attributable to specific projects. Projects are defined as
operational activities which are governed by a single contract,
licence, lease, concession or similar legal agreement, and form the
basis for payment liabilities with a government. Where agreements
are substantially interconnected in operating and geographical
terms, with substantially similar terms, those agreements should be
treated as a single project. Payments may be disclosed at an entity
level where payments are made in respect of obligations imposed at
that entity level rather than at a project level.
Rounding
The amounts shown in this report have been rounded to the
nearest US$1,000.
PAYMENTS TO GOVERNMENT - 2022
COUNTRY
SUMMARY
-------------------------------- ------------ ---------- ---------- -------- ---------- ---------------
Production Taxes Royalties Dividends Bonuses Fees Infrastructure Total
entitlement improvements
US$ US$ US$ US$ US$ US$ US$ US$
--------- -------------------------------- ------------ ---------- ---------- -------- ---------- --------------- ------------
Chile - 779,628,000 - - - 6,531,000 - 786,159,000
United
States - - - - - 592,000 - 592,000
-------------------------------- ------------ ---------- ---------- -------- ---------- --------------- ------------
Total - 779,628,000 - - - 7,123,000 - 786,751,000
--------- -------------------------------- ------------ ---------- ---------- -------- ---------- --------------- ------------
CHILE
------------- ------------ ---------- ---------- -------- ---------- ---------------
GOVERNMENT REPORT Production Taxes Royalties Dividends Bonuses Fees Infrastructure Total
entitlement improvements
US$ US$ US$ US$ US$ US$ US$ US$
--------------------- ------------- ------------ ---------- ---------- -------- ---------- --------------- -------------
Tesorería
General
de la
República
de Chile - 779,628,000 - - - 6,531,000 - 786,159,000
Total - 779,628,000 - - - 6,531,000 - 786,159,000
------------- ------------ ---------- ---------- -------- ---------- ---------------
PROJECT REPORT Production Taxes Royalties Dividends Bonuses Fees Infrastructure Total
entitlement improvements
US$ US$ US$ US$ US$ US$ US$ US$
------------- ------------ ---------- ---------- -------- ---------- ---------------
Los Pelambres - 353,684,000 - - - 862,000 - 354,546,000
Centinela - 397,267,000 - - - 1,664,000 - 398,931,000
Antucoya - 11,276,000 - - - 255,000 - 11,531,000
Exploration
activities
(within Antofagasta
Minerals S.A.) - - - - - 3,639,000 - 3,639,000
Antofagasta Minerals
S.A. - (1,029,000) - - - - - (1,029,000)
Inversiones Los
Pelambres Ltda. - 18,430,000 - - - - - 18,430,000
Michilla Costa - - - - - 19,000 - 19,000
Minera Pampa
Fénix
SCM - - - - - 92,000 - 92,000
------------- ------------ ---------- ---------- -------- ---------- --------------- -------------
Total - 779,628,000 - - - 6,531,000 - 786,159,000
--------------------- ------------- ------------ ---------- ---------- -------- ---------- --------------- -------------
UNITED STATES
-------------- ------- ----------- ----------- --------- -------- ---------------
GOVERNMENT REPORT Production Taxes Royalties Dividends Bonuses Fees Infrastructure Total
entitlement improvements
US$ US$ US$ US$ US$ US$ US$ US$
------------------- -------------- ------- ----------- ----------- --------- -------- --------------- --------
Department of
Interior - - - - - 394,000 - 394,000
Minnesota
Department
of Natural
Resources - - - - - 198,000 - 198,000
-------------- ------- ----------- ----------- --------- -------- --------------- --------
Total - - - - - 592,000 - 592,000
-------------- ------- ----------- ----------- --------- -------- --------------- --------
PROJECT REPORT Production Taxes Royalties Dividends Bonuses Fees Infrastructure Total
entitlement improvements
US$ US$ US$ US$ US$ US$ US$ US$
-------------- ------- ----------- ----------- --------- -------- ---------------
Twin Metals - - - - - 592,000 - 592,000
-------------- ------- ----------- ----------- --------- -------- --------------- --------
Total - - - - - 592,000 - 592,000
------------------- -------------- ------- ----------- ----------- --------- -------- --------------- --------
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