Chile Rejects $2.5 billion Copper-Iron Project 


 

On Monday, the special committee within the Chilean government rejected plans proposed by privately owned company Andes Iron go ahead on a $2.5 billion copper and iron mining project; ordering all related construction to be stopped immediately. The project had been rejected in March by an environmental commission, but because of Andes Iron’s appeal to their ruling, it was sent to the special ministers’ committee for review.

Andes Iron proposed project was looking build the Domingo complex, which included a desalination plant, a new port, a processing facility, and an open pit mine that would have had the ability produce over 10 million tonnes of iron and 150,000 tonnes of copper annually from the northern region of Coquimbo. Andes Iron said the construction on the mine and related infrastructure was projected to create nearly 10,000 jobs and 1,450 permanent positions.

Chile’s Ministers’ Committee, composed of the heads from Chile’s Mining, Economy, Environment, Agriculture and Health committees, expressed concern and pointed to numerous flaws with the project; stating they believe the project did not provide sufficient environmental guarantees. The project has also been largely criticized by environmental groups.

“The compensation measures were insufficient and could not guarantee the protection of species of concern. We are not against economic development or projects that are necessary for the country’s growth, but they must offer adequate solutions for the impact they will have,” Environment Minister Marcelo Mena said.

Coquimbo lies on the coast, south to islands that make up Chile’s Humboldt Penguin Reserve, which is home to a variety of wildlife species; including blue whales, fin whales, and sea otters. The endangered Humboldt penguin is distinguished by its pink rings around its eyes and a black stripe across its chest. The reserve is estimated to have several thousand penguins living within the reserve, home to ~80 percent of the worlds Humboldt penguin population.

The evaluation for the project drew criticism from the Chilean business community, and many conservative politicians, who argued that politics had played an oversized role in the process. Andes Iron Chief Executive Ivan Garrido announced his intention to appeal the decision and slammed it as arbitrary and politically motivated. Chile’s National Mining Society was quoted saying “this decision was bad news for mining and for the country”.

However, authorities pointed out numerous weaknesses in the proposal, including the projects proximity to the reserve, and said the company had failed to consult local communities within the region. Minister Mena said the decision by the committee was based on technical aspects and information from 14 agencies; taken without “political considerations”.

Chileans also raised concerns, feeling uneasy about the business ties the former president, and now candidate, Sebastian Pinera had to the project. Those in favor of the deal have alleged that the current President Michelle Bachelet played a role in recent permitting difficulties, pointing to the scenic land she owns nearby.

Mining companies are said to had a harder time obtaining permits in Chile in recent years because of growing interest in the environment from both politicians and the pubic.

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