Chile urged to get $40 billion mine projects back on track

January 16, 2014

Chile’s mining association, SONAMI, is urging that country’s incoming center-left government to find a way to restart approximately $40 billion in mining projects that have been halted in the country.

President-elect Michelle Bachelet will take the reins of the country, a mining powerhouse, on March 11 with a strong mandate for reform.

Awaiting her are a number of mining and energy projects which have been delayed due to unclear regulations and increasing opposition from local communities and environmental groups, Reuters reported.

Falling metal prices have put the brakes on other projects and expansions.

Despite the $40 billion in delayed or blocked investments, SONAMI's overall forecast for $100 billion investment in the Chilean mining industry is still intact, said Alberto Salas, president of the organization.

That amount was forecast to be funneled into the Andean country within the next 10 to 12 years, according to an estimate in January of last year. However, the delays mean it could now take longer to materialize than previously forecast.

Barrick Gold Corp. and Goldcorp have both encountered problems getting major projects online. Barrick’s $8.5 billion Pascua-Lama gold project was suspended earlier this year by Chile’s environmental regulator who cited, "severe environmental harm" because pre-stripping activities had begun before water protection infrastructure was finished, threatening local water supply.

Goldcorp's roughly $3.9 billion El Morro copper and gold mine  was blocked by an indigenous community that said it was not properly consulted about the project, which it says is planned on sacred ancestral land and could pollute a local river.

Chile's copper output is seen rising to top 6 Mt (6.6 million st) this year, a record level and up from last year's estimated 5.77 Mt (6.3 million st), boosted by higher production at privately held mines and as new projects come on line, SONAMI said.

Recoveries at the massive Escondida mine, run by global miner BHP Billiton, and the Collahuasi mine, a partnership between Glencore Xstrata Plc and Anglo American Plc, have boosted Chile's mining industry in the past months.

State copper miner Codelco's new $3 billion Ministro Hales copper project in Northern Chile is also set to nudge up overall production.

SONAMI represents some 70 miners and aims to foster the development of private mining in Chile.


Related article search: