The mining law reform that will require mining companies to pay more royalties and taxes was passed by Chile’s lower house of Congress by a vote of 101-24. The measure now only requires the signature of leftist President Gabriel Boric, who has publicly backed it, to become law.

Chile is the world’s top copper producer and No. 2 in lithium, both seen as key to making future fleets of electric vehicles powered by rechargeable batteries.

Lawmakers in Chile’s Senate approved modifications to the tax and royalty bill a week earlier

Chile’s government said it reached an agreement with senators to cut the top tax rate to 46.5 percent from 47 percent for companies that produce more than 80 kt (88,000 st) of fine copper a year, and 45.5 percent for production in the 50 kt – 80 kt (55,000-88,000 st) range.

The bill had initially proposed a ceiling of 50 percent, but this was brought down repeatedly amid legislative debate and criticism from the mining industry.

Reuters reported that the lopsided vote was hailed by Finance Minister Mario Marcel, who underscored that the higher government take required of mining companies would address past abuses.

“With this legislation, we seek to avoid what happened many times with our country's natural riches: they were exploited, they disappeared, which left very little for the country and its future development," Marcel told reporters after the vote.

The new law also establishes a 1 percent ad valorem tax on copper sales from companies that sell more than 50 kt (55,000 st) of fine copper, as well as an additional 8 to 26 percent tax depending on the miner's operating margin.

Mining association Sonami expressed relief that the measure ended uncertainty over the type of reform lawmakers would ultimately adopt.

“Uncertainty lasted for almost five years and, without a doubt, hurt the country's main productive activity,” Sonami said in a statement.

The association described the final legislative language as “better” than what was initially proposed by the government, giving credit to Marcel for enacting industry-friendly revisions.

Photo: A mining truck at a Codelco operation in Chile