The executive director of Plusmining argues that “a structural change is necessary to simplify processes, eliminate redundancies, and promote a positive approach to investment.” This year, with elections and key reforms on the line, could mark a turning point for the future of Chile’s mining industry.
A year ago, the government introduced a legislative package to tackle the so-called “permit process,” referring to the bureaucracy and permitting requirements for investment projects in the country. These often involve multiple competent agencies and hinder the development of key investments, including in the mining sector.
For the executive director of the consulting firm Plusmining, Juan Carlos Guajardo, the current outlook for these reforms this year will be shaped by the presidential election and the need to drive economic growth.
According to Guajardo, last year marked a significant milestone with the acknowledgment of issues in the permitting process.
“This was positive because it demonstrated concern from the government”, Guajardo stated. However, he warned that “progress has been uneven: while sectoral permits have shown good advancement, key areas such as environmental reform lag significantly behind”, he added.
“I don’t believe these sectoral reforms alone can make a significant difference.”
How do you evaluate the progress of permit reform and its projected impact for 2025?
Last year, we witnessed something important regarding the recognition of the issue. I think that’s what we should highlight the most. The introduction of these projects reflects concern, and that’s commendable. However, we’ve seen somewhat uneven progress in permit-related projects. While the sectoral permit bill has advanced with significant momentum, other projects have faced more challenges.
The reform of the Environmental Assessment Service has not progressed as rapidly as the sectoral permits reform. Therefore, there is uneven progress in this area. This should be the year when these projects are translated into laws, at least in the case of sectoral permits.
As for the environmental reform, it’s also possible it could become law, but it will require a much tougher effort and likely more negotiations. Now, regarding the effectiveness of these measures, we hold a more cautious view. While recognizing the positive aspect of identifying this as a problem, we believe these are still initial steps and unlikely to resolve the issue on a deeper level.
Do you think progress in sectoral permits is enough to improve the permitting process for projects?
As I mentioned, these are partial advances. I don’t think these sectoral reforms alone can make a significant difference. They are steps forward, but addressing Chile’s permitting issue will require a much greater effort. I primarily point to the need for a change in the state’s attitude to facilitate projects.
From today’s perspective, projects must overcome a 50 kilometer obstacle course to reach the finish line. They must navigate permits, community claims, environmental organizations, the judiciary, and so on.
It’s a full-fledged obstacle course. What we see with these projects is that perhaps the course will be shortened from 50 to 30 kilometers, or some obstacles will be removed, but it remains an obstacle course. What must change entirely is the perspective, embracing the conviction that projects are beneficial. Of course, requirements and standards should be imposed, but from a positive outlook, not from the challenging perspective we currently have.
Chile and Its Competitiveness
What measures would be essential to improve the sector’s competitiveness?
I believe what’s needed here is a true reengineering. A much greater simplification and rationalization of permits are required. There should be a comprehensive vision of what it means to develop a large-scale project. This vision should translate into permits that are rational, streamlined, and harmonious, resulting in an agile process. This is a crucial condition: rationalization stemming from a deep reengineering process.
Currently, we face a fragmentation of actors, where everyone wants to emphasize their own concerns, making it nearly impossible to reach agreements and advance complex projects. That’s what I’m focusing on—turning this situation around and making it much simpler. This, of course, requires broad agreements but, above all, agile political and executive power that prioritizes correctly.
How do you view the projection for mining investment in Chile, considering Cochilco’s latest report of US$83.181 billion?
Our estimates align with these figures; the big question is how much of this will materialize.
This increase in the project portfolio reflects more announcements than actual materializations. The real concern is how much of this and how quickly it will translate into concrete projects. For the reasons we discussed earlier, along with financial or global political factors, not all of it will come to fruition. Most of the investment, about 90%, is in expansion or operational continuity projects. These are very difficult to postpone, which provides some certainty. However, it also means there are few new projects, making it challenging to significantly increase mining production in Chile.
Could the electoral landscape impact mining investment?
The major uncertainties for the mining industry were resolved with the royalty issue and the rejection of the constitutional proposal. It’s hard to imagine significant policy proposals that would drastically alter conditions for the mining industry. The important variable will be the level of governance achieved in Chile. If the upcoming election fosters greater political stability, it could encourage investors. But if a fragmented scenario persists, creating governance challenges, this could become an additional barrier.
Source: El Periodista