SANTIAGO 20 December (Reuters) – Chile’s mining sector is preparing for tighter environmental rules after President-elect Gabriel Boric promised to oppose a controversial $2.5B iron-copper mine. The controversial mine was approved in August following years of legal wrangling.
Boric said to a cheering crowd, “To destroy the whole world is to destroy yourself,” in his first speech following Sunday’s election victory.
The 35-year-old leftist lawmaker was critical of the Dominga mining project, which critics claim could decimate La Higuera, a coastal ecosystem rich with biodiversity and home to large numbers of marine mammals, birds, and fish. Andes Iron, the privately held owner of the project, has long refuted that assertion.
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Boric, who assumes office in March and campaigned on a promise to overhaul Chile’s market-oriented economic system. However, details regarding his stance towards mining were not available. His comments on Sunday suggested that environmental regulation might be where he wants to make the most difference.
Boric stated, “We don’t need more’sacrifice zone’ (areas high in pollution), we don’t desire projects that destroy our country and destroy communities, and we exemplify an example that has been symbolic: No to Dominga.”
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Juan Carlos Guajardo from Santiago, who heads consultancy Plusmining, stated that “if there is something that can have an impact on the mining sector, I believe it should be the environment issues.”
Chile is home to the world’s largest lithium reserves. This ultra-light metal is mined using brine below the Atacama desert salt flats. Regulations around water use are already being scrutinized. Boric has criticised privatization of the sector and wants a government-owned lithium company.
The Andean nation, the world’s largest copper producer, is also the No. 2 lithium producer. The country is also the 2nd largest producer of lithium, which is a key ingredient in electric vehicle batteries. Both metals are experiencing sharp price increases due to high demand and a global rush for supply.
Chile is currently debating raising taxes on mining firms, something Boric supports, as well as a stalled bill protecting glaciers in the mineral-rich Andes. If left unchanged, the industry claims that this measure would put at risk existing mines and hinder new ones.
It could have an impact on the Andina, El Teniente and Los Bronces mines of Codelco, the largest copper producer in the world, as well as Anglo American (AAL.L), Los Bronces, Los Pelambres of Antofagasta(ANTO.L), and Caserones, which are all linked to JX Nippon Mining.
The National Mining Society (Sonami), which represents companies in the sector declined to comment on Sunday’s remarks by the president-elect or on the outlook for Dominga.
Consulting Teneo stated in a report that “It is evident that the new wealth as well as environmental taxes are on horizon”, while the presidency will support plans for raising royalties on mining companies.
Boric, who has softened his tone in recent weeks in order to win over centrist voters said that environmental adjustments would need to be gradual.
“Not all things can be done simultaneously, and we will have the need to prioritize to make progress that permits us to improve, one by one, the lives our people,” he stated.
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Fabian Cambero Reports; Editing by Adam Jourdan & David Gregorio
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