If the mining industry is expropriated and nationalized in the manner and under the context in which it has been proposed by the Constitutional Convention, investments and productive ecosystems will be largely excluded.
By Manuel Viera
Santiago de Chile.- The Environment Commission of the Constitutional Convention has overshadowed the environment in recent weeks with its proposals on mining. And it is that a proposal for nationalization in the Bolivarian style, in the current globalized and modern context, is very difficult to understand.
We are waiting for what happens in the vote in the plenary of the Convention, but in the meantime it is possible to evaluate the consequences that a regulation of this nature could have.
Today, the national mining industry is made up of a complex framework that includes the public and private sectors in the large, small and medium-sized mining segments. That mixed and varied model that allowed Chile to catapult itself and become the world’s largest copper producer with currently almost a 30% share.
In the same way, Chile has also become a pole of attraction for investment. According to the latest registry of Cochilco, we have 51 initiatives valued at US$ 68,925 million. If materialized, these figures will mean payments in local jobs and services, that is, the productive chains. These investments are directed and distributed within the rich ecosystem of suppliers, which certainly includes the most specialized ones, but also restaurants, hotels, transportation, laundries and different kinds of ventures.
We know that the next steps of our mining should be focused on achieving an internationalization of Chilean mining suppliers that provide technology, machinery and IT solutions to the world. Likewise, we must consider the energy transition; the mines must be operated using clean energy in their processes. With the advantages that Chile has in solar and wind energy, we would be delineating the virtuous circle where we produce minerals such as copper and lithium that clean technologies demand without emissions.
And what happens to all of the above if the mining industry becomes nationalized? Indeed, it is a blow to this ecosystem and there would be an imbalance of proportions, considering that mining is an activity that requires intensive risk capital, starting with its initial phase, exploration, an increasingly complex activity in Chile, where to find deposits is increasingly difficult.
Constitutionally today minerals are property of the State of Chile, only possible to extract by private through concession. If the mining industry is nationalized in the manner and under the context in which it has been proposed by the Environment Commission, investments and productive ecosystems will be largely excluded.
If the mixed model is lost, we would be giving way to an incompressible course, a real derailment that will not allow us to reach the development that is proposed to be achieved through these measures, to which is added the lack of competitiveness and an increase in country risk. From the Mining Chamber of Chile we emphasize that both the State and the private sector must work harmoniously for the future of the nation.
Manuel Viera is President of the Mining Chamber of Chile