SANTIAGO - Chile's Senate on Thursday pushed forward an amended version of the country's mining royalty bill, which would raise tariffs on firms operating in the world's top copper producing nation despite being watered down amid industry pushback.

The upper chamber's Mining Commission waved through the amended draft, which seeks to address concerns within the copper and lithium industries that higher tariffs will hit Chile's competitiveness and hurt new investment.

The commission approved the adjusted bill that proposes royalties based on two areas: first the value of gross copper sales and a second calculated according to profitability, similar to the current tax model for the industry.

The commission said the bill would see an 'ad valorem' tax corresponding to 1% of annual sales of copper products applied to firms producing under 200 000 metric t of copper per year. Mines producing under 50 000 t would be exempt.

"For companies that produce higher levels, the royalty will be applied depending on the average annual copper price registered according to the prices of the London Metal Exchange," the commission added.

Chile's mining industry has strongly opposed plans to raise taxes, arguing that the level is already at its limit. Lawmakers, especially from the leftist opposition, have pushed to increase taxes to bolster funds for social spending.

Leftist President-elect Gabriel Boric, 35, comes into office in March after his strong election victory last year. He does, however, face a divided Congress which is likely to temper any reform plans.

The modified bill includes a sales tax of some 3% for lithium, but excludes contracts signed with a development office in the Salar de Atacama, where the two main current lithium miners Albemarle and SQM operate.

The bill will now move to the Senate Treasury Committee and then will be reviewed in a plenary session of the chamber, to later return to the lower Chamber of Deputies.

"We hope that the Treasury Commission can quickly deal with this initiative and that before March 11 of this year we can send this project into law," said Senator Yasna Provoste, president of the parliamentary body.

The global price of copper has hit a decade high fueled by expectations about a recovery from the coronavirus pandemic.

In addition to state mining firm Codelco, the world's top copper producer, multinationals such as BHP, Anglo American, Glencore, Antofagasta Minerals and Freeport operate in Chile.