What are recent developments in the Chilean mining industry?

The inauguration of Teck's Quebrada II project in Tarapacá was a highlight, involving an unprecedented US$8.6 billion investment and overcoming pandemic challenges, showcasing Chile's ability to execute major projects under adverse conditions. However, we also faced a general decline in copper production, prompting the need for increased efforts to generate and execute more projects.

The approval of the new mining royalty, while initially introducing uncertainty, has now provided clearer future tax conditions, aiding decision-making for new ventures. Despite this, obtaining and processing environmental and sectoral permits remains a significant challenge, affecting both new and ongoing projects. These concerns have been communicated to the authorities, and we hope to develop an agenda this year to resolve these issues. What is Chile’s position in the global copper sphere?

The global demand for copper is driven by the fight against climate change and the decarbonization of the global economy. This moral backing transforms the opportunity into a significant responsibility. Chile's contribution to global greenhouse gas emissions is only 0.26%, with mining accounting for 17% of that.

Instead of focusing on competitiveness, we should aim to surpass our current production levels. We have the resources, people, knowledge, engineering, and means at our disposal. Our economy is open to investments; we just need to create the right conditions for these investments to materialize and operate.

We must increase productivity, re-evaluate our tax system, identify investment barriers, and provide necessary facilitation. Growth is more crucial than revenue ambitions. For every 1 million t of fine copper produced, we estimated fiscal revenue of US$1.35 billion when copper was below US$4 per pound. With current prices, this could reach US$2 billion per every 1 million t produced.

Chile holds nearly a third of the world's copper reserves and are expected to produce 35% of the global supply. This means we need to deliver 2 million more tons of fine copper, but we are currently aiming for only 1 million. What role will medium and small mining play in meeting the copper shortage?

Medium-scale mining accounts for about 4% of national mining production, while small-scale mining contributes around 1%, equating to 50,000 t of fine copper. Though significant, these amounts are relatively minor in the national context. However, these sectors offer the greatest proportional growth opportunity, especially since there are few large greenfield projects available today. We believe small-scale mining could double its output. Historically, ore grades were higher, but today's small-scale mining is better mechanized and prepared for larger operations. How has the lithium industry developed since the approval of the National Lithium Strategy?

The National Lithium Strategy is ineffective. The government has not provided a clear path, causing further delays and uncertainty. Only CORFO’s leased concessions in the Atacama Salt Flats are producing lithium, showing that concessions explicitly including lithium are effective. Replicating this model elsewhere could streamline processes, as private companies would likely cooperate to advance projects due to high lithium prices.

The government has given Codelco and Enami exclusive rights to develop significant lithium deposits, potentially causing conflicts with existing concession holders. Codelco purchased a project from Lithium Power International but admits it lacks the capacity to develop all projects alone and has partnered with SQM for its Atacama project. Is Chile’s infrastructure prepared to support increased mining activity?

Completing all mining projects will pressure the development of renewable energy and alternative fuels like green hydrogen. Desalination is a viable option for water supply, however, regulatory approvals for desalination can take over 11 years, so we need to act quickly to address these hurdles and meet our project needs promptly. The pressure to optimize resources has grown, and it is time for a collaborative effort. Authorities and organizations should facilitate conversations to create shared infrastructure. Do you have a final message?

Today's mining has a strong ethical motivation. We are responsible for producing the critical minerals needed for global decarbonization. This responsibility requires concrete commitments. As a country, we must unite—authorities, companies, investors, and workers—toward this goal.

We have the chance to validate our industry, which has faced criticism, by meeting our production challenges. We can achieve this sustainably, respecting the environment and communities.