Chilean Government Seeks Foreign Mining Investment

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--The Chilean government promises stability for the mining sector, despite a constitutional reform. This week, Chile hosted one of the largest conferences that gather international and local companies, aiming to attract investments to the nation's mining and energy sectors.

InvestChile, as the event is known, featured the presence of President Gabriel Boric and the Minister of Mines Marcela Hernando, who tried to dissipate clouds of uncertainty.

During his speech, Boric gave special importance to the private sector by highlighting that "we need to reactivate the economy, and foreign investment plays a tremendously important role [in that]." Additionally, the president praised Chile's institutional stability and said that this offers significant opportunities for the private sector to invest and have a framework that would guarantee the sector sees the fruits of their investments.

Echoing the president's statement, Mining Minister Hernando also highlighted the importance of institutional stability in the country and mentioned that the current constitutional reform does not represent a risk for the mining industry.

Additionally, the minister highlighted that the government has been in constant dialogue with the private sector and the industry, and she criticized those that raised the alarms on the possibility of expropriations. According to Hernando, the Chilean government does not have expropriations within its plans nor have they considered expropriations as part of its reforms. Instead, she believes that the government must promote a tranquil environment for investments.

Hernando also offered insights about the government's concerns within the mining sector. According to the minister, the lower mining production from Codelco (Santiago, Chile), and the slower recovery of exploration budgets, were among the key concerns.

Mining exploration in Chile collapsed in 2020 during the pandemic; however, mining exploration budgets have been slowly increasing since then. Between 2021 and 2022, funds destined for exploration were 24.6% higher, accounting for slightly more than US$700 million in the exploration of copper, gold, lithium and other metals.

Based on the numbers provided by Hernando, Chile accounts for a 5.5% stake in the global exploration budget.

As part of InvestChile, the minister mentioned that the South American nation has projected a total of 53 mining projects between 2022 and 2031 with a value of US$73.6 billion.

Out of those, nine are greenfield-related projects. Meanwhile, Codelco will be heading six of those projects with a total share of 24%, while the private sector will manage 57% with 25 projects.

The government remains optimistic about the expected investments and launching of mining projects over the next few years, as about 17 of the projects have already commenced, while another 17 are highly probable to materialize. Combined together, 59% of the 53 projects are very likely to occur over the next few years.

Chile continues to set its eyes on the mining industry while also appeasing the concerns of the market over possible risks related to royalties and nationalization.

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