Leftist Boric’s environmental reforms target Chilean mining companies

Climate change and environmental regulation will be a focus of the structural change proposed by the leftist government Gabriel Boric, which will target large mining companies operating in Chile.

In his first speech after a resounding victory, the 35-year-old legislator underlined the impact of climate change and said that he does not want projects that “destroy” the country and that have resulted in places saturated with pollution.

In addition to the discussion to increase the tax burden of mining, the current Congress has pending a debate on a glacier law, both will now have the support of the new government after the resistance of the current center-right administration.

“Climate change, dear compatriots, is not an invention. It is here, and it generates direct effects on our lives and those of future generations ”, said Boric after the electoral victory.

Mining companies have long been criticized by communities and environmentalists for the demand for water for their operations, the installation of tailings and its eventual impact on the mountain glaciers.

“If there is something that can have a relevant impact on the mining business, in my opinion, we should start looking at the environmental issue,” said Juan Carlos Guajardo, head of the consulting firm Plusmining.

Congress has delayed the discussion of the glacier protection law which, according to the original wording, could endanger even some mines that are producing and restrict new operations in the Andes Mountains.

Andina and El Teniente of state-owned Codelco – the world’s largest copper producer – Anglo American’s Los Bronces, Los Pelambres de Antofagasta and Caserones, linked to JX Nippon Mining, are the projects that could be affected if the legal text is approved without adjustments .

Alejandra Wood, executive director of the Center for Copper Studies (Cesco), hopes that the new government will seize the opportunity that this metal has in the energy and electrical transition “laying the foundations for greater investment, better productivity and promoting careful activity of its socio-environmental footprint ”.

Boric also pointed directly to the controversial Dominga copper-iron project as an example of the kinds of initiatives it doesn’t want.

“To destroy the world is to destroy ourselves. We do not want more sacrificial zones, we do not want projects that destroy our country, that destroy communities, and we exemplify this in a case that has been symbolic: No to Dominga, ”he told the crowd that celebrated his victory on Sunday night.

The National Mining Society (Sonami), which groups together the companies in the sector, did not want to comment on the appointment of the president-elect to the project.

In the first trading on Monday, shares of SQM, the world’s second largest lithium producer, fell more than 10% amid a general market decline after the triumph of Boric, who has criticized the privatization of the exploitation of natural resources as light metal and proposes to create a state company to boost its production.

The eventually stricter environmental regulations would affect both the public and private sectors.

On the central coast of Chile, Codelco owns the Ventanas smelter and refinery in one of the so-called “sacrifice zones” due to high levels of contamination and where the state oil company ENAP has been charged with environmental breaches.

All this occurs when the prices of raw materials such as copper rise strongly in international markets, which has awakened the appetite of legislators to obtain a greater slice of the resources that are extracted from the country.

“It’s clear that new wealth and environmental taxes are on the horizon, while the mining royalty initiative will get a boost from the presidency,” consulting firm Teneo said in a report.

However, Boric warned that environmental adjustments and improvements in quality of life will have to be gradual.

“Not everything can be done at the same time and we will have to prioritize to make progress that will allow us to improve the lives of our people step by step. It will not be easy, it will not be quick, but our commitment is to advance along that path with hope and responsibility ”, he affirmed.