Chile rejects $2.5 billion mine project on environmental risks in snub to business


Environmental activists shout slogans before Chile’s committee of ministers denied permits for Andes Iron’s Dominga copper and iron mining project, in Santiago, Chile, January 18, 2023. (REUTERS/Ivan Alvarado)

Chile’s government rejected a $2.5 billion iron ore project near a nature reserve in the north of the country after a decade of legal wrangling, on concern it would endanger local species. 

A committee of government ministers on Wednesday voted unanimously against Andes Iron’s Dominga project, Environment Minister Maisa Rojas told a press conference, citing the “unique ecological value” of the area. Andes Iron, owned by the local Delano and Garces families, said it would appeal the decision in environmental tribunals. 

The Dominga project is a flash-point between business interests in Chile – a global investor darling and mining powerhouse – and activists that warn it would wreak havoc on the local environment. By halting the controversial project, the left-wing government of President Gabriel Boric risks endangering the business climate in Chile’s main industry at a time the economy is expected to fall into recession this year. Today’s ruling is unlikely to be the end of the story.

“The Domingo project not only fulfills, but exceeds all standards, and is in line with the principles established by the government for sustainable development,” Andes Iron said in a press release. “We are confident that at the end of the process, truth and justice will prevail.”

Wednesday’s vote was little surprise after President Gabriel Boric repeatedly slammed the initiative on the campaign trail in 2021, warning that it would destroy one of Latin America’s most important marine ecosystems. 

The project aimed to produce 12 million tons of iron concentrate and 150,000 of copper concentrate. It envisaged the generation of 10,000 jobs during construction and 1,500 once up and running. 

Dominga first requested environmental approval more than a decade ago. It hit the popularity of former President Sebastian Pinera after it was revealed he once held an indirect stake. 

In 2017, a ministerial committee under former President Michelle Bachelet blocked the project, citing insufficient environmental protection. After that vote, Bachelet’s Finance Minister Rodrigo Valdes and Economy Minister Luis Felipe Cespedes both resigned.

That move was later overturned by a local court, arguing that it didn’t follow legal process. Last year, the Supreme Court declined to rule on the matter and ordered the committee of ministers to make a second vote. 



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