Chile to repress mining ‘speculation’ to stimulate exploration

Chile’s new government is seeking to crack down on companies that leave their exploration permits inactive for years in an attempt to boost investment and open up new areas, mining minister Marcela Hernando said.

Speaking to the press at an exploration event in Santiago on Monday, Hernando He said that while licenses have been issued for about 80% of the country’s mining territories, only about 3% is being explored or exploited.

“We know that there is a lot of speculation regarding mining concessions and we are interested in correcting that”, the minister said. “That will allow us to give more certainty”.

Chile is the world’s largest producer of copper and the second largest of lithium, although the country has been losing global market share in recent years, in part because much of the prospective areas are occupied by a few companies. As a result, drillers have concentrated on other jurisdictions, including some mining-friendly provinces in neighboring Argentina.

The new administration of the president of ChileGabriel Boric, also seeks to increase investor confidence by working with the new regional authorities to clarify what part of their territories are available for exploration and production.

“Although there is a certain feeling that exploration could be important in Chile, my perception is that it is not,” Fernando said. “As a country, little is explored.”

Another concern for the industry is a planned tax increase. The government will seek to carry out those plans through a royalty bill that is already before Congress, or as part of a broader package of tax reforms.

The government will listen to all industry players before going ahead with those plans, Hernando said.

With respect to a proposal presented in the Constitutional Convention of Chile to nationalize the mining industry, the minister said that expropriations are not part of the current government program.