Ecuador court gives green light for Silvercorp, Salazar’s El Domo project
The ruling removes the last major obstacle for the $250 million project, located 150 km northeast of Guayaquil.
(Image courtesy of Codelco | Flickr)
By Fabian Cambero
SANTIAGO, June 28 (Reuters) – Mining companies operating in Chile are examining restarting projects that were put on hold in recent years due to a copper price slump, the mining minister and industry executives said, though final investment decisions will wait until political uncertainty lifts after the November presidential elections.
The price of copper, by far Chile’s most important export, started to slowly recover in October, after years of weak demand for the red metal. So far in 2017, prices have risen 7 percent, and analysts expect further increases as the copper market moves toward a deficit.
That, in turn, is causing miners to slowly examine projects put on the back burner years ago when prices begin to slide from historic 2011 highs.
“One perceives more movement from the projects that were, one way or another, delayed by price,” Chilean Mining Minister Aurora Williams told Reuters in a recent interview.
But even as prices rise, miners are wary of a relatively unsettled policy landscape in the South American country, various industry sources told Reuters in recent weeks.
During the past three years, center-left President Michelle Bachelet has pushed through a series of reforms to the nation’s tax and labor code. While supporters say they have been necessary to lessen the nation’s biting inequality, many industry leaders say they are squeezing business, and new labor laws contributed to a massive strike at BHP Billiton’s Escondida mine earlier this year that led to $1 billion in lost production for the company.
“[The reforms] have made the sector timid to announce new investments. There’s been a loss of confidence,” said one high-ranking source in a foreign miner, who requested anonymity due to the sensitivity of the matter.
While a business-friendly ex-president, Sebastian Pinera, is the favorite in the November presidential election, leftist independent Alejandro Guillier is close at his heels, and a win by him would unsettle the already-leery industry.
MINERS LOOK, BUT DON’T LEAP
In the meantime, miners are taking a gradual approach to any potential expansions.
Former Antofagasta Minerals CEO Diego Hernandez, who now heads Chile’s mining industry body Sonami, said firms were eyeing expansion plans, though brick-and-mortar investments would probably be delayed until the second half of 2018.
Canada’s Teck Resources, for instance, is taking steps in the permitting process for a potential $4.7 billion expansion at its Quebrada Blanca mine, while BHP has said it would analyze a $2.2 billion expansion of its Spence mine this August.
U.S. miner Freeport-McMoRan and Chile’s state-run Codelco, meanwhile, are currently carrying out studies to determine the viability of a $5 billion expansion at their El Abra mine.
Still, some projects that were shelved are unlikely to be revived any time soon. Proposed major expansions at Anglo American and Glencore’s Collahuasi mine and Antofagasta’s Los Pelambres, for instance, show no medium-term signs of going forward. (Reporting by Fabian Cambero; Writing by Gram Slattery; editing by Diane Craft)
