Environmental Commission Rejects Major Chile Mine Project

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By Tom Azzopardi

An environmental commission in northern Chile narrowly rejected a major iron-ore and copper mine project, sparking concerns that the ruling could hurt investment in Chile.

Members of the environmental assessment commission for the region of Coquimbo voted 7–6 to reject the $2.5 billion Dominga initiative, with regional government head Claudio Ibanez casting the decisive vote.

The vote came even after other environmental officials recommended approving the project following a three-year study.

But a majority of commissioners in the March 9 vote expressed concern about the potential impact of what would be Chile’s largest iron-ore mine on the marine ecosystem and Humboldt Penguin National Park, a nearby marine protected area.

“Significant observations and arguments were made about the impact on these reserves, which are worthy of concern,” Ibanez said following the vote.

‘Less Attractive’

The project would have created almost 10,000 jobs during its construction phase, amid a major downturn in mine investment in Chile. Its rejection shook the country’s mining industry.

“We believe that this is just the kind of decision which has led us to become less attractive as a mining jurisdiction,” Diego Hernandez, president of national mining association SONAMI, said in a statement released after the vote.

Chilean mining company Andes Iron SpA, which owns the project, said it will appeal the decisions before the Ministerial Council for Sustainability, Chile’s highest environmental policy-making body.

“We respect the environmental institutions, and we are going to appeal,” said Andes Iron CEO Ivan Garrido.

It is not the first time that projects near Humboldt Penguin National Park have fallen afoul of the approval process.

Seven years ago then-president Sebastian Pinera blocked plans by French energy group GDF Suez (now known as Engie) to build a 400-megawatt coal-fired thermoelectric plant in the zone after its approval sparked nationwide protests.

To contact the reporter on this story: Tom Azzopardi in Santiago at correspondents@bna.com

To contact the editor responsible for this story: Greg Henderson at ghenderson@bna.com

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