ANGLO American said Chilean authorities had formally rejected the environmental permit application for the extension of the firm’s Los Bronces copper mine – although the group added that the door was open to appeal the decision.
The UK-listed group said on April 22 that the Environmental Assessment Service of Chile (SEA) had recommended rejecting the permit for the Los Bronces Integrated Project (LBIP).
Anglo said it was examining the details of today’s decision and that it “… expects to continue following the regulated permitting process in Chile, which includes the potential to request a review by a Minister’s Committee to evaluate the full breadth of merits of the project”.
“LBIP represents a multi-billion dollar investment in the future of one of Chile’s largest copper mines and is an example of modern mining where the full range of sustainability considerations have been consulted on and designed in from the outset,” said Anglo.
According to JP Morgan Cazenove analyst Dominic O’Kane, the SEA’s decision is indicative of a more challenging operating environment in Chile, compounded by the government’s review of mining related taxes and duties that could be increased.
“Permitting delays and preventative decisions across the global mining industry are highly relevant for the long-term outlook of new metals supply,” said O’Kane. Significantly extended timelines for project approvals and development “… are likely to be a key factor for tightness in long dated physical metal supply,” he added in a report.
Production from Los Bronces was unlikely to be affected for the next two financial years. “However, we believe a entrenched negative decision could have longer-term implications,” said O’Kane. JP Morgan forecasts Los Bronces’ output falling from 340,000 tons of copper in 2022/23 to about 290,000 tons a year from 2024 until 2040.
The extension project at Los Bronces aims to expand the current open pit and replace future lower grade ore by accessing higher grade ore from a new underground section of the mine, said Anglo.
“The project uses the mine’s existing processing facilities, optimises water efficiency, and requires no additional fresh water or tailings storage facilities,” the group said. Ten years of scentific studies stood behind the expansion project including emission mitigation and studies demonstrating there would be no impact on biodiversity, glaciers and human health, it added.
In January, Chile’s Mining Commission waved through an amended draft to the country’s proposed mineral royalties bill aimed at addressing concerns within the copper and lithium industries that higher tariffs will hit Chile’s competitiveness and hurt new investment.
The commission said the bill would see an ad valorem tax corresponding to 1% of annual sales of copper products applied to firms producing under 200,000 tons of copper per year. Mines producing under 50,000 tons would be exempt.
Chile’s youngest ever president, the Leftist Gabriel Boric was sworn into office in March after winning elections last year. However, a dividend congress is expected to temper reforms Boric plans which are in response in violent protests in Chile during 2019.