(Recasts, updates with mining minister comments on safety)

By Alonso Soto

SANTIAGO (Reuters) - Chilean President Sebastian
Pinera Friday proposed boosting royalties paid by mining
companies to fund reconstruction after a devastating
earthquake, and his government called for tighter safety
standards after a cave-in trapped 33 miners.

Pinera said his government will propose a new voluntary
mining royalty expected to raise $1 billion to help fund
reconstruction after a massive earthquake in February.

The royalty would have to be voluntary because the country
already has contracts with foreign miners that expire around
2017. Pinera hopes miners will agree to pay higher royalties
amid growing expectations for foreign companies to contribute
more to the post-quake rebuilding.

The stunning finding of 33 miners trapped deep underground
after a cave-in on Aug. 5 is also likely to boost his
popularity and support in Congress to approve royalty reforms.

In a speech to mark 6 months of the devastating quake,
Pinera said the bill will be sent to Congress next week.

Chile is the world's biggest copper exporter, and public
pressure has been building to make foreign miners who profit
from the country's resources contribute more to rebuilding
damage from the earthquake.

The opposition-led legislature scrapped his original
proposal after leftist lawmakers said the government should aim
for a higher royalty increase. Global miners like BHP Billiton
, Xstrata and Anglo American
currently pay a fixed royalty of around 5 percent.

In the original proposal, the government sought to raise
royalties by replacing the fixed rate for a sliding one of
between 4 to 9 percent that varies depending on the companies'
margins in exchange for extending a tax freeze for eight
years.

Pinera did not detail the proposed changes to the royalty
or if he had agreed with the opposition over reforms.

A major mining trade group has said the royalty hike is
discriminatory. Experts, however don't expect the reforms to
hit investment in the mining powerhouse.

Mining Minister Laurence Golborne said Friday the
government plans to create a new mining superintendency to
oversee mining permits and safety standards.

He said the government also plans changes to safety
regulation in the wake of the San Jose mine accident that has
kept 33 miners deep undergound for over three weeks. The miners
were found alive on Sunday, but their rescue could take several
months.

(Reporting by Santiago newsroom; Editing by David Gregorio)