CEPAL Review no. 124

CEPAL Review N° 124 • April 2018 107
(both public and private) will be equivalent to the latter’s share in total copper production in Chile. This
is a conservative assumption, since rents obtained from large-scale mining tend to be higher than those
of small and medium-sized mines, as a proportion of their production.
The mining rent calculated by the World Bank for GMP-10 (R bm,Gmp10
) and the State-owned
CODELCO (R bm,Cod
) can be expressed as:
where
R bm,Gmp10
+ R bm,Cod
= (1–B) · R bm,Total
(1)
B = the share of total World Bank mining rent that does not correspond to GMP-10 or to CODELCO, and
R bm,Total
= total World Bank mining rent.
(b) WB GMP-10 mining rent
The same World Bank procedure (Brandt, Schreyer and Zipperer, 2013) can be used to express
the WB GMP-10 mining rent in terms of the WB CODELCO rent, from equation (1), as follows:
where,
p = market price of copper,
q Cod
= CODELCO production,
R bm,Cod
= p · q Cod
+ S Cod
– c Cod
· q Cod
– (r+d) · K Cod
(2)
S Cod
= additional revenue from CODELCO by products,
c Cod
= total unit cost of CODELCO operations, 3
r = normal rate of return to capital,
δ = capital depreciation rate, and
K Cod
= CODELCO capital stock.
Thus, it is possible to obtain the following expression for the World Bank GMP-10 mining rent.
R bm,Gmp10
= (1–B) · R bm,Total
– R bm,Cod
(3)
(c) GMP-10 compensated rent
The GMP-10 compensated rent (R C,Gmp10
) is the World Bank rent corresponding to GMP-10,
with two additional corrections: exploration risk premium (h) and compensation for the volatility of the
copper price (f).
R C,Gmp10
= R bm,Gmp10
– h – f (4)
The exploration risk premium for GMP-10 (h) is defined on the basis of López and Figueroa (2014).
This premium corresponds to the increase in exploration expenditure, according to the probability of
success in the exploration tasks, and the rate of return to capital, less the declared exploration expenditure:
h = E Gmp10
(5)
3
This total operating cost does not correspond to the direct unit operating cost, c1, referred to below, because corrections have
been made to take account of copper sold in concentrate form. Annex A1 describes the methodology used to take account of
the fact that CODELCO sold an average of 14% of its copper in unrefined state during the period.
Gino Sturla Zerene, Ramón E. López, Eugenio Figueroa B. and Simón Accorsi O.