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The Chilean election and mining, water use and fracked-gas imports from Canada

Reuters reports, “Leftist candidate Michelle Bachelet was the clear winner in Chile’s presidential election Sunday, although she will have to wait until a second-round runoff (on Dec. 15) to seal her victory. With nine candidates running, the vote was fractured and Bachelet, seeking her second term as president, fell just short of the 50 per cent she needed for an outright first-round victory.”

Another Reuters article notes, “(Bachelet has vowed) to hike corporate taxes to fund an educational overhaul. That raised concerns that her government might seek to tap the profitable metals industry in the world’s No. 1 copper producer, though aides say the sector will not be significantly affected by her reform blitz beyond a planned across-the-board corporate tax increase to 25 percent from 20 percent.”

“Water is a major issue after a series of annual droughts, with much mining taking place in the Atacama, the world’s driest desert, where communities often feel they have to compete with mines for their water supply. Mining firms currently have the right to use any water found during their work, according to Chile’s water code, which dates from General Augusto Pinochet’s 1973-90 military rule. Critics say this is a form of privatizing water.”

“Her program is scant on details but some suggested constitutional changes could pave the way for a greater state role in the industry and an end to miners’ sweet deals on water use in the future, mining industry executives and local analysts say. …Her program mentions that a planned new constitution, slated to replace one drawn up under a military dictatorship, will ‘recognize full, absolute, exclusive, unalienable and unlimited public control over water (and) mining’.”

While there appears to be the promise of some reform in this regard, “Bachelet has emphasized that Chile must ‘recover’ its competitive edge in mining, chiefly by taming high power prices and improving the concessions system to facilitate the creation of new mines and encourage exploration. …Chile produces around 5.7 million tonnes of copper a year and roughly $112 billion in mining investments are planned in the country over the next eight years.”

The article adds that Barrick Gold shelved its Pascua-Lama gold mine last week, but “Bachelet will likely make liquefied natural gas the backbone of her energy policy to ease the mounting power crunch, though some mix of coal, hydropower and renewables will probably also be used.” Last June, the Globe and Mail reported, “Chile wants to buy Canadian liquefied natural gas to feed its energy-hungry mining industry… Chile is particularly short of power in its northern regions, where much of the mining sector is centred, and it also needs vast amounts of energy to use in the desalination of water, which is also in short supply in the north.”

In March 2012, we released a report entitled ‘Chilean Patagonia in the Balance: Dams, Mines and the Canadian Connection’. The report highlighted the rising demand for more energy in Chile is driven by that country’s rapidly expanding mining industry and noted that major investments in the Chilean mining industry are supported by loans and loan guarantees from Export Development Canada, Canada’s export credit agency. And we have expressed our solidarity with Comunidad Agrícola Diaguita Los Huascoaltinos (Diaguita Huascoaltinos Indigenous and Agricultural Community) and their efforts to stop the Pascua Lama mine; campaigned against the Ontario Teachers Pension Plan ownership of privatized Chilean water utilities; and opposed the expanded Canada-Chile Free Trade Agreement.

Further reading:

NEWS: Chilean court to hear Diaguita claim against Pascua Lama open-pit gold mine
NEWS: Protests for public education in Chile, while OTPP buys up private water utilities
UPDATE: Vancouver-based Teck mining company in Chile
NEWS: Harper announces ‘expanded’ Canada-Chile FTA