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Aurora Williams: "The Chile - Canada Relationship is Going Through a Major Breakthrough"

Aurora Williams: "The Chile - Canada Relationship is Going Through a Major Breakthrough"

Posted by Jose Traboulsi on March 04, 2015

The PDAC (Prospectors & Developers Association of Canada) Fair of Toronto, the world’s most important mining event, has welcomed thousands of visitors from the energy sector this year, which is a key sector in the economic development of Latin America. The importance of the Fair was reflected by the presence of prominent political representatives from diverse countries throughout the region. Several mining ministry officials have attended meetings in Toronto, conferences and rendez-vous with the press, during which the close relationships between the sector’s policies and economic growth were exposed. Aurora Williams, Chilean mining minister, participated Sunday May 1st in several events of the PDAC. She talked to PanamericanWorld about the challenges that her country faces and its close ties with Canada.

Photo:  Christian Peña

Q: What makes Chile unique?

A: Geographically Chile has an advantage with respect to other countries. It has the largest copper reserves in the world, and also has substantive reserves of gold and silver, molybdenum and lithium, as well as potassium.

We are a country rich in mining.

Chile provides about 31.8 % of the world’s copper, and 27.5% of the world’s copper reserves are in our country.

But the most important thing is the concept we have of mining: for us, mining encompasses not only exploration and exploitation, but also innovation.

Many of our companies and entrepreneurs offer innovative solutions for mining, forming a “mining cluster”. It provides high-quality services and technology, which in turn helps investments.

For us, mining also means experience. We have a critical mass of professionals and technicians with high-level experience who are capable of overseeing projects such as Chuquicamata mine, run by Codelco (Chile’s state-owned copper mining company).

Chile is just 180 km wide and on average 4,300 km long, with strikingly diverse geography, from bountiful agricultural valleys that lie at the foot of the Andes to the driest desert in the world (the Atacama). To the south, is breathtaking Patagonia. Our country has different mineral resources that can be explored and exploited. They also offer enormous investment opportunities.

Economically, Chile has seen sustained economic growth over a period of 30 years, thanks to a large extent to the mining sector. Mining is the motor of the economy, and it will continue to be one of the most important activities that makes up a large percentage of our GDP.

Q: How would you characterize Chile’s relationship with Canada?

A: We have an important relationship with Canada. We have common interests and shared values. We have had a Free Trade Agreement since 1997 and bilateral trade has grown at an annual average of 10 %. In 2013, total trade between Canada and Chile reached $2.48-billion, and $1.5-billion in the first half of 2014. We now have a dual listing on the Santiago and Toronto Stock Exchange Venture, so junior companies can seek capital in both markets. Puma Exploration and Chilean Metal Inc., two Canadian mining juniors, are the first to list their shares.

In addition, I would like to mention that it is beneficial for us that Canada lifted the visa requirement for Chileans in 2014.

Q: How is the volatility in the commodities market impacting Chile’s economy? Sixty per cent of the export market is copper.

A: The decrease in the price of copper is partly offset by the recent collapse in the price of oil. As well, Chile has $14.8-billion in a sovereign wealth fund so our public finances remain healthy. We are committed to diversifying our economy and export base.

Q: Chile continues to implement and enforce in some cases new environmental regulations in the mining sector. How can Canadian companies prepare for this change in landscape?

A: Similar to Canada, Chile encourages mining projects to have broad and sustained support from the community. As a member of the Organization of Economic Development and Cooperation, we must also comply with higher environmental standards and practices than in the past.

Through the creation of our new specialized environmental institutions, there is a higher bar expected and greater enforcement.

Q: What specific laws are you referring to with regards to local communities?

A: We have laws that govern the participation of communities in mining projects. Indigenous people directly affected by a project must be included in consultation process. That’s a right protected in the International Labour Organization’s convention number 169.

The Environment Impact Assessment outlines the technical criteria for an investment project and governs citizen participation.

Q: Some say the regulatory environment can be confusing and contradictory. How do you address this?

A: We are reforming our legal norms, some of which have been in place for 30 years. We are implementing legal reforms with a long-term goal.

We understand there are challenges and that there will be a period of adjustment especially for companies who have been in Chile for a long time. But Chile is very transparent. You can view all the permits and regulatory obligations on line at www.minmineria.cl

Q:  Where will Chile be a future leader?

Chile is moving towards a sustainable development model. We have always taken advantage of our natural biological resources including forestry, aquatic resources, mining and agriculture in a sustainable way.

We believe our approach is good for business and leads to greater profitability and greater innovations in water-recycling technologies and waste recycling.

Q: What challenges does the mining industry face aside from environmental?

A: Water and energy are two. We are already working to use water more efficiently and desalination – especially in the Atacama Desert in the north – is one option.

We also know the mining sector has increased its energy consumption and we need to continue to develop new sources of non-conventional renewable energy and increase efficiency. Chile remains the most stable place to do business in the region, with one of the most open and competitive economies in Latin America and globally. We have 24 free trade agreements with 62 economies, giving us access to 63% of the world’s population.

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