The South American country's large-scale mining industry is moving between high standards of efficiency and a constant process of technological reconversion and environmental adaptation, while it must navigate a climate of "permissiveness," in which various government organizations delay the launch of new operations.
The fight between miners and civil society in Chile is not new. Conflicts over water, greenhouse gas emissions, destruction of glaciers and alteration of ecosystems, on the one hand, versus investment, taxes and jobs, on the other.
Governments are in the middle, and must find an elusive balance. And in this regard, the Chilean Executive has recognized for some time now the problem of the so-called “permisology”, the excessive bureaucracy and requests for permits of all kinds by the State.
Perhaps no other industry is more affected by this phenomenon than local mining. At the end of August, the National Mining Society was lamenting that US$ 10 billion had been paralyzed due to this cause.
Similarly, the Mining Council – which brings together the country's major mining companies, such as AngloAmerican, Barrick, BHP, Collahuasi and Escondida – addressed the issue on Thursday during an event on mining technology, hosted by the American company Honeywell in the Chilean capital.
Its spokesman, Joaquín Villarino, recalled that there are projects worth almost US$24 billion in progress and that there are others worth almost US$45 billion additional, in different stages of evaluation.
Indeed, the 2023-2032 investment portfolio of the Chilean Copper Commission (Cochilco) contains 49 projects, totaling an investment of US$ 65,712 million and includes projects in the copper sector from both state and private companies, also covering the mining of gold, iron, lithium and other industrial minerals at different scales.
Last year, some projects from the previous portfolio were successfully completed, with a cumulative investment of US$ 7.77 billion, including Teck's Quebrada Blanca project. But structural adjustments have resulted in the withdrawal of four projects totaling US$ 12.691 billion in investments.
The issue is that, as Cochilco itself acknowledges, in contrast to the previous portfolio for the 2022-2031 period, which included 53 projects with an investment of US$73,655 million, a significant reduction has been observed, with 10 projects, for US$20,461 million, excluded from the current portfolio.
At the same time, six new initiatives were added, injecting an additional US$6,307 million into the portfolio, including initiatives such as Teck's "QB2 Milling Capacity Increase" and BHP's "Spence Operational Adaptation".
However, Villarino did not want to talk about 'permisology' or criticize the current government.
“It is not that they are paralyzed in the public apparatus, I am not saying that,” the executive clarified to AméricaEconomía . “There is a portfolio to be developed; the resource is uncovered, and what is happening now is that we have to go through all the stages to make it viable.”
Villarino, who during his presentation sought to maintain an even-handed approach to the mining problem - not to be self-flagellating or complacent - highlighted the work done by the Ministry of Finance together with the National Commission for Productivity and Evaluation for the areas that present the most 'bottlenecks'.
"I think that we should not look for some [government services] that are worse than others. What we have to do is look for and work on how to 'make the State more efficient' (…) these forums allow us to see many technologies that are available for business development. Why don't we incorporate them into the development of state activity?" Villarino mused.
But he did stress the need to speed up the pace in pursuit of investment.
“If we continue at the current pace, we will not be able to increase production. Chile could be producing seven million tons, there is a project portfolio of more than US$ 40 billion…there are investors who believe in Chile. There is human capital. There are resources, there is infrastructure,” he stressed in his presentation.
MINING IN THE ENERGY TRANSITION
For the mining leader, it is his industry that must lead the energy transition that will allow it to confront the negative effects of climate change.
“To achieve this, the world needs minerals and, therefore, we should have a responsible attitude, providing them by producing responsibly and contributing to greater global well-being,” Villarino said.
Villarino's list of environmental advances in Chilean mining is extensive and spectacular: the sector will seek emissions neutrality by 2040, while Chile's official goal is 2050.
“We have made a transformation of our unique energy matrix. Today, in the mining sector’s energy matrix, 70% comes from renewable energy, and it was this sector that initiated its introduction,” Villarino said. The sector’s goal is to raise that to 90% in the next decade. “In some places we have mining companies with 100% renewable energy, that is, there is a commitment here,” he added.
On the water issue, today mining claims to consume 4% of the country's water. But, in addition, it recycles 75%. "We are tremendously efficient (…) Before it was all the same, we could use water without any kind of responsibility. Today we know that is not the case," said Villarino in his speech, showing how water consumption per ton of copper processed from 2010 to 2022 dropped by almost half.
The introduction of seawater, raw or desalinated, is also part of the innovation in the mining sector highlighted by the union leader.
“34% of water consumption comes from the sea, and we know that we have to move towards being an industry that practically does not use continental water,” he added.
Even with these advances, Villarino knows that this industry generates environmental controversy and is sometimes not valued positively by certain sectors of society.
“I think that no one has ever ignored the fact that there are environmental impacts [in mining] and that is why we carry out environmental impact studies to remedy, alleviate and compensate for the environmental damage caused by mining activity (…) This is probably the industry that needs the most permits, that has the greatest number of inspections and we are focused on having an impact on nature, not just neutral, but positive,” he emphasized.
MINING, GOOD NEIGHBOR
However, the most difficult factor for his sector is the sometimes difficult relationship with the communities. In this regard, Villarino recalled the traditional thesis of mining and good neighbors.
“You cannot come to the point of making people's lives worse. Today, as important as having a good resource to develop the activity is having a good relationship with the communities. In Chile there are cases of success and of complete failure. There are mining projects in which US$ 4,000 to US$ 5,000 million have been invested, and not one ounce of copper, one ounce of copper or gold has been mined. And why? Because if you do not have a good relationship with the communities, your project may become unviable,” he recalled.
Villarino pointed out that something similar happened during the processing and study of the so-called Royalty Law, when the phrase "Mining takes everything and leaves nothing" became popular.
"This, to justify the need to increase the tax significantly. But (...) of all the resources generated by the industry at a given time, 56% went to pay suppliers, inputs for services. That was injected into the national economy to a large extent. Purchases from suppliers and capital goods were 19%. Therefore, we have practically 75% injected into the national economy. In contribution to the Treasury, 12%. Practically 80% of the flows stay in the country," he reaffirmed.
His final message of support for the sector is that mineral exploitation is a valid business and capable of combating climate change. Only then is his speech more harsh.
"No one can sit in this conversation. If you want to improve the quality of life, you need more minerals, and so it's very easy to take the rather selfish attitude of saying: 'I don't want mining here, but I want to enjoy all the benefits of a modern society with higher levels of well-being.' I believe that those who fight against the industry, the truth is that they enjoy, or suffer, from a very dramatic selfishness, because they want to live in a global environment free of contamination, where we can counteract global warming, but they are not willing to 'put their shoulder to the wheel' and that, the truth is, does not seem right to me," concluded Villarino.
