May 18 (Bloomberg) -- Chile's Senate approved a plan to increase taxes on mining companies to take advantage of a surge in copper prices to boost government revenue in the country, the world's biggest producer of the metal.

The bill, which will tax miners' operating income by as much as 5 percent, now will be reviewed by the lower house, according to the Senate's Web site.

The tax would increase costs for such companies as BHP Billiton Plc, the world's biggest mining company, Phelps Dodge Corp. and Anglo American Plc. The government said most of the revenue will be earmarked to help develop industries to replace mining when Chile's copper deposits run out. The country supplies about a third of the world's mined copper.

To contact the reporter on this story: Heather Walsh in Santiago at hlwalsh@bloomberg.net

Last Updated: May 18, 2005 21:51 EDT