Indonesian officials said this past week they are close to an agreement on the major Grasberg mine. Which would see a price set for the government’s legislated purchase of a 51 percent interest in this world-leading operation.
And elsewhere, more major developments emerged for the global copper market. With a leading presidential candidate in the world’s top producing nation saying he wants to overhaul the local mining sector.
That’s Chile, which is gearing up for a presidential election in November. And this week, center-left candidate Alejandro Guillier laid out a 10-point plan for mining reforms — which could mean major changes coming for the Chilean copper sector.
Most of Guillier’s proposed changes are positive. With the candidate pledging to make royalties and environmental impact procedures more amenable for the mining sector.
Guillier also said he would move to streamline the permitting process for major mining projects — by creating a new office dedicated to the review of proposed large-scale operations.
But the biggest change proposed by Guillier would shake Chile’s copper sector to its foundation. By repealing a secret and controversial piece of legislation that has dogged the local mining sector for decades: the Copper Reserve Law.
Under that rule, Chilean state copper miner Codelco is required to transfer a portion of profits each year to fund Chile’s armed forces. With the law having been criticized for a lack of transparency, being outside of the control of Chile’s parliament.
Guillier said he would push for a complete repeal of the law. Which could open the door to Codelco keeping a larger portion of its profits — and thus having increased funds for expansions and new project developments.
That in turn could lead to increased production from Chile as a whole. Guillier also said he wants to do the same with lithium, by creating special state agencies to support development of new projects. Watch for results of the presidential election in November and December.
Here’s to change coming.
By Dave Forest
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