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Chile's minister of mines to explore ways to streamline permitting process
October 23, 2014

Chile’s president, Michelle Bachelet, called for a 60-day review of ministerial permitting processes, with a view to improving efficiency for mining permits while still protecting the environment.

Chile's mining minister, Aurora Williams, said she is working to streamline the increasingly cumbersome mine permit process in a bid to support an industry that is crucial for the country's economic growth.

Numerous projects, including Goldcorp El Morro and Barrick Gold Corps. Pascua Lama, have been delayed because of red tape or local opposition to the projects.

"We have set up a specific team to revise the permitting process for mining investment," Williams told Reuters at the annual London Metal Exchange (LME) Week industry gathering in London.

"There are various inefficiencies. For example there can be duplications where two institutions ask for the same documents. Sometimes there are permits that are asked that do not really add value to the final evaluation of the project."

Experts have long criticized a nebulous regulatory framework in Chile that has left energy and mining projects in legal limbos, sometimes for years, exasperating environmentalists and companies alike.

Earlier, the chief executive of copper miner Antofagasta said the environmental permitting process in Chile generally takes 12 months or more because over the years, more and more stakeholders have gotten involved.

"The ongoing (permit) revision is going to highlight some aspects that need to be improved. A deeper revision will (also) take place. The end of the revision is expected in Q1 2015," said Williams.

It is crucial for Chile to streamline its permit processes given its investment environment is seen as less welcoming following a recent tax reform, under which corporate taxes will gradually increase from 20 up to 27 percent.

Like many resource-intensive countries, Chile is struggling to balance mining-led growth with social and environmental protection, though it did recently approve $4 billion worth of funding for state-run firm Codelco.

Codelco is facing a crucial juncture in its history. It needs to implement a $30 billion investment and expansion plan to revive its aging mines at a time of falling copper prices.

The company produces nearly a third of Chile's copper, but if it fails to upgrade its mines, its production will halve within six to eight years and state coffers would be severely dented, meaning less money for development plans.

The company recently pledged to be frank and prompt in informing the people of Chile about potential delays to its expansion plans, which are currently being reviewed by new chief executive Nelson Pizarro.

"Given the size of the projects - these are mega projects - there is a possibility of delays," said Williams.

Chile still accounts for more than 30 percent of global copper output, although its share is falling -- a problem the government would like to help tackle given copper sales make up over half of the country's export revenue.
 

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