By Fabian Cambero
SANTIAGO, April 13 (Reuters) - Chile's copper production
should pick up in the coming years after a recent slump, mining
minister Marcela Hernando told Reuters on Thursday, adding that
dialogue with mining firms over planned tax and royalty changes
was helping ease industry concerns.
The Andean country is the world's top producer of copper,
which is key to the global push towards vehicle electrification,
but it has seen production slide in recent years.
Chile's "production slump" was caused by a drop in mineral
grades, delays in some projects, accidents, and other logistical
obstacles, said Hernando, acknowledging too that companies had
complained about policy uncertainty since the center-left
government of President Gabriel Boric took power last year
pledging higher taxes and a new constitution.
"We hope that rut, that we have to go through anyway, will
be significantly made up for over the next few years," she said,
adding that there was nearly $74 billion in planned mining
investments in the country to 2031, much of it in copper.
Chile, home to major mines of state behemoth Codelco, the
world's top copper producer, BHP Group , Glencore Plc , Anglo American and Teck Resources ,
saw a 5.3% year-on-year production drop of the metal last year.
The industry has criticized government plans to increase the
tax burden on the sector, saying it would hit the country's
competitiveness against neighboring no. 2 producer Peru, though
Hernando countered that Chile offered stability.
"What these firms value above all is stability," she said at
her office at the mining ministry in Santiago. "And one of the
things that is recognized in this country is political stability
and respect for laws and international treaties."
On April 17, the world's top copper players will travel to
Chile for the first in-person CRU World Copper Conference since
the start of the pandemic to discuss demand, prices, supply and
other industry topics.
Hernando said she expected demand for copper to rise
strongly due to the fight against climate change and shifts to
electrification from fossil fuels, and cited positive signs
about returning investment in Chile.
On price, she expected the metal to remain stable, targeting
an average price this year of $3.85 per pound, in line with
forecasts from state regulator Cochilco and the central bank.
"When we make projections, we try to be as conservative as
possible and in this context we prefer to stay with market
expectations," Hernando said. "It is close to what Cochilco has
already anticipated and therefore there will not be many
variations in that."
(Reporting by Fabian Andrés Cambero; Writing by Alex Villegas;
Editing by Adam Jourdan and Rosalba O'Brien)
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