Chile Takes First Step to Nationalize Mining

Chile’s constituent assembly, in charge of writing the country’s new Constitution, approved a proposal on Saturday to nationalize its mines. Chile has some of the world’s largest copper and lithium mines. The motion, which mostly target large scale copper, lithium and gold mines, still needs approval from two thirds of the full assembly to become part of the new Constitution to be put on a national referendum later this year.

The proposal has been rattling private mining interests in the country. Chilean state, who already owns underlying mineral rights, will have one year to nationalize companies if the bill becomes law.

The private firms in metallic and non-metallic minerals sector, as well as hydrocarbons fear that they will not be given compensation if mining is nationalized. Regulators will determine that based on the book value of the companies, paid over a maximum of 30 years. The projects which have begun before 1993 will have to submit to environmental evaluation within three years. Former concessions made in prohibited areas, such as those near glaciers and on indigenous lands will be revoked.

Chile has been working to rewrite its Constitution dated back to the Pinochet dictatorship. The South American nation is the world’s largest copper producer and home to its largest known lithium reserves.

Chile produced 5.6 million tonnes of copper in 2021, about 25% of world’s total. It was also expected to generate almost $70 billion in possible mining projects this decade. The private companies fear it will not materialize if the country nationalizes its mines.

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