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BHP sees Chile uncertainties easing in investment climate boost

28th September 2022

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Chilean regulatory uncertainties that have held up some investments in the biggest copper-producing nation are dissipating, according to top mining company BHP Group.

In a referendum earlier this month, Chileans overwhelmingly rejected a proposed new constitution, while authorities are showing their willingness to receive feedback on planned tax hikes, BHP President Minerals Americas Ragnar Udd said Tuesday.

“The uncertainties are easing,” he said in an interview from the Perumin conference in Arequipa, Peru. “We’re starting to see a bit more moderated conversations around the constitution in terms of what that’s going to look like one way or the other.”

BHP, which operates the world’s biggest copper mine in Chile, has dangled $10-billion to develop more resources in the country if those uncertainties are finally resolved. Huge investments are needed to help boost global supply at a time when demand for the wiring metal is set to rise as the world turns away from fossil fuels.

While it’s up to Chileans to decide whether they want a regulatory environment that remains competitive with other mining nations, people do recognize the importance of a stable economy, Udd said.

“The conversations I’ve had would suggest that there is a sensation that the reality is that Chile has an important role to play in the world and some of the changes that we see going forward probably won’t be as extreme as we’ve seen in the past,” he said.

In the case of its smallest mine in Chile, Cerro Colorado, BHP is exploring alternatives to continue operating beyond 2023, when its current permits expire. A solution probably would include the use of seawater, either desalinated or salt water, he said.

“That’s a process and studies we’re working through at this point.”

Edited by Bloomberg

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