ANGLO American said Chilean authorities had formally rejected the environmental permit application for the extension of the firm’s Los Bronces copper mine – although the group added that the door was open to appeal the decision.
The UK-listed group stated that on April 22, the Environmental Assessment Service of Chile had recommended rejecting the permit application for Los Bronces Integrated Project.
Anglo said it was examining the details of today’s decision and that it “… expects to continue following the regulated permitting process in Chile, which includes the potential to request a review by a Ministers Committee to evaluate the full breadth of merits of the project”.
“LBIP represents a multi-billion dollar investment in the future of one of Chiles largest copper mines and is an example of modern mining where the full range of sustainability considerations have been consulted on and designed in from the outset,” said Anglo.
According to JP Morgan Cazenove analyst Dominic O’Kane, the SEA’s decision is indicative of a more challenging operating environment in Chile, compounded by the government’s review of mining related taxes and duties that could be increased.
“Permitting delays and preventative decisions across the global mining industry are highly relevant for the long-term outlook of new metals supply,” said O’Kane. Significantly extended timelines for project approvals and development “… are likely to be a key factor for tightness in long dated physical metal supply,” he added in a report.
Production at Los Bronces was not expected to be affected over the next two financial year. “However, we believe a entrenched negative decision could have longer-term implications,” said O’Kane. JP Morgan projects Los Bronces’ copper production to fall from 340,000 tons in 2022/23, to approximately 290,000. Tons per year from 2024-2040.
Anglo said that Los Bronces’ extension project will expand the current open-pit mine and replace lower-grade ore with higher grade ore from an underground section.
“The project uses the mines existing processing facilities, optimises water efficiency, and requires no additional fresh water or tailings storage facilities,” the group said. The expansion project was supported by ten years worth of scentific studies, including emission mitigation and studies that showed there would not be any impact on biodiversity, glaciers or human health.
In January, Chile’s Mining Commissionwaved through an amended draft to the country’s proposed mineral royalties bill aimed at addressing concerns within the copper and lithium industries that higher tariffs will hit Chiles competitiveness and hurt new investment.
The commission stated that the bill would include an ad-valorem tax equal to 1% of annual copper product sales applied to companies producing less than 200,000 tonnes of copper per year. Mines producing less that 50,000 tonnes would be exempt.
Chile’s youngest ever president, the Leftist Gabriel Boric was sworn into office in March after winning elections last year. A dividend congress is expected, however, to temper Boric’s plans for reforms. These plans were made in response to violent protests in Chile in 2019.