Since 2001 Chile has budgeted on the long-term copper price and saved the surplus in a stabilisation fund; since 2023 it shares royalty revenue with regions by formula. Its copper sector ranked 2nd of 89 assessments, and state-owned Codelco ranked 1st among state companies (NRGI 2017).

Key facts

Exhibit 1
ChapterWhat Chile does
2. Royalty (2023)For producers above 50 kt of copper a year: a 1% ad valorem tax plus a margin-based tax; maximum effective rate of 46.5% for producers above 80 kt (DLA Piper, LatinNews)
6. Fiscal ruleStructural balance rule: spending is set by the revenue the state would earn at potential GDP and the long-term copper price (BIS)
6. Independent inputsIndependent expert committees set potential GDP and the long-term copper price; the Fiscal Council observes (World Bank)
6. FundEconomic and Social Stabilization Fund (FEES), founded 2007 with US$2.58 billion; US$3.9 billion at end-May 2026 (Hacienda, Dipres)
6. UseDrawn down in bad years instead of borrowing; in 2024, three withdrawals of US$800m, US$607m and US$1,000m (Hacienda)
7. Regional sharingUS$450m a year from the royalty: US$225m regional development fund, US$170m territorial equity fund for the poorest municipalities, US$55m for mining municipalities (InvestChile)
7. ResultsIn April 2024, CLP 93.6 billion transferred to 307 municipalities with over 12 million residents (Mining Reporters)

What Mongolia can copy

  • Budget on long-term copper and coal prices set by an independent expert committee, not the Ministry of Finance.
  • Split a fixed share of royalties three ways by formula: all aimags, the poorest soums, and soums affected by mining (for example Khanbogd and Tsogttsetsii).
  • Publish state mining company reports to Codelco's standard.

What doesn't transfer directly

  • Chile's rule rests on 20+ years of an independent central bank and a professional finance ministry; Mongolia should first protect the price committee's independence in law.
  • Chile has seaports; Mongolia's exports depend on borders and rail, which adds logistics risk on top of price swings.

This profile is part of the report Sharing Resource Wealth and focuses on chapters 6 and 7 of the 12-chapter template. Research on the other chapters is in progress.

Sources