(Bloomberg) — Proposals to severely restrict private ownership of Chile’s giant copper and lithium deposits will get one more roll of the dice after falling short in a Constitutional Convention vote Saturday.
While a package of proposals passed the two-thirds threshold in the plenary, many individual articles fell short, including those limiting private capital in copper to ventures that are majority owned by the state and replacing concessions with temporary permits.
Saturday’s voting will come as somewhat of a relief to mining companies and global metal markets, although many items have one more chance to be modified in committee before going back to the plenary ahead of next week’s deadline. Two prior attempts to get versions of the package through the plenary failed.
A broad item declaring minerals the domain of the state was approved. Others to allow nationalizations and ban mining in glaciers, watersheds and the ocean floor fell short. Articles to ban genetically modified crops and ensure the right to farm exports and equitable energy supply will also return to committee. New rules on water rights, greater protection of “natural spaces” and food security guarantees were approved.
The measures were presented by a committee stacked with young ecological activists and left-wingers, elected in the wake of protests that began in October 2019 over inequality. The full convention floor has a more diverse mix of members.
Radical measures proposed by the committee would trigger international legal battles, impair Chile’s investor-friendly reputation and put at risk an almost $70 billion project pipeline, BTG Pactual analyst Cesar Perez-Novoa wrote before the vote.
Those investments are crucial for supplying the clean energy transition. To be sure, surveys show a trend toward rejection of the document in a plebiscite scheduled for September.
“We’ve got some really, really exciting plans for Chile as an organization,” BHP Group President Minerals Americas Ragnar Udd said in an interview earlier this week. “We hope that the uncertainty gets resolved soon.”
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