Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Mining companies operating in Chile will deliver a proposal document to the elected assembly drafting a new constitution for the world’s largest copper producer, an industry association said on Monday, seeking stability for the sector.
The National Mining Society (Sonami) said the proposal document is the result of work carried out since 2020 and that it focuses on sustainability, the legal framework for mining and the wider economic environment.
Chile is redrafting its decades-old market-friendly constitution after major protests in 2019 laid bare social anger and wide inequality in the mineral-rich Andean nation. The rewrite could have an important impact on the mining sector.
“It would be desirable to keep in place protections for mining concessions regarding royalty payments, which bring the necessary certainty and stability to firms with mining concessions,” Sonami said.
“This mechanism has been internationally recognized for its objective, transparent and easy-to-control operation.”
The mining body said the assembly should consider elements including state versus private investment, water use, indigenous communities, technological innovation and regulation.
The authors of the new constitution, elected in a national vote, are skewed towards more independent and left-wing representatives after voters rejected candidates from the ruling center-right bloc and other traditional parties.
The mining sector has previously raised concerns about the impact of the constitutional redraft, has stressed the importance of maintaining the rules of the game, and sought to have a say in debates over the new constitution.
Mining taxes and royalty payments on copper and battery metal lithium are in the spotlight in Chile and neighboring Peru, while copper prices have hit all-time highs this year.
(By Fabian Camero and Adam Jourdan; Editing by Paul Simao)
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