Chilean National Mining Policy 2050 – The Role of Sustainability in the Chilean Mining Industry

In 2019, Chile started working on the 2050 National Mining Policy and is now starting to wrap up with the final stages. The process involved over 200 experts, 1500 workshops, and public consultations. The new policies are meant to ensure that the mining industry is sustainable over time, in addition, to being an important and valuable source of jobs and income to the country. The goal was to create a strategic document that would help the mining industry and government navigate the future economic, social, environmental, and governance aspects of the mining industry in Chile.

As the first of our two-part series, we look at the environmental aspects that the 2050 National Mining Policy. ESG is a hot topic in the industry right now. The 2050 National Mining Policy takes note of this important trend outlining how the country could harmonize the development of the mining industry with the environment, achieve carbon neutrality, and growing the circular economy model.

Water Resources 

• Reduce the percentage of continental water used in the mining industry, not exceeding 10% of the total water used by 2025 and 5% by 2040, promoting other sources that do not compete with human consumption.
• Actively participate in the development of integrated river basin management (IWRM) by 2022 with implementation beginning by 2025.
• Promote the publication of guides to understand the legal framework, regulations, and permits necessary for the development of seawater desalination plants.
• Provide and facilitate information regarding mining projects, determining their relationship with the glaciological environment in order to protect glaciers
• Protect glaciers, whatever their form, prohibiting any type of activity that involves their removal, transfer, or covering with overburden material and/or debris.

Tailings 

• Eliminate critical tailings factilties by 2030 and ensure there is no abandonment of tailings by 2050.
• Reduce conventional tailings, promoting other forms of depositing, such as filtered, thickened, or paste, establishing a reduction percentage by 2022 and complying with it by 2030.
• Reach 100% compliance with the National Tailings Deposit Plan for more sustainable mining by 2030.

Decontamination – 

• Establishing goals for PM10 and PM2.5 for the mining industry by 2025, and achieve compliance by 2030.
• Achieve international standards in sustainability and environmental responsibility in smelters and refineries in the country by 2030.

Biodiversity

Regarding Biodiversity, the policy highlights that it intends to generate a positive net impact on biodiversity by 2050 in all large and medium-sized mining projects developed from 2021 onward. Other goals set by the National Mining Policy, in relation to carbon neutrality, focus on reducing CO2 equivalent emissions from large-scale mining operations by at least 50% by 2030. It also includes:

• Generating zero-emission fleet plans by 2025 for large-scale mining and start implementation by 2030.
• 90% of electricity contracts in the mining sector come from renewable sources by 2030 and 100% by 2050.
• Establish goals for GHG emissions of scope 1, 2, and 3, complying by 2030, and their subsequent monitoring and updating.
• That 100% of the companies have a management and audit system for energy efficiency by 2050.

Environmental

Being at the forefront of resource and environmental management is a clear goal for this policy as well as addressing its impacts and generating a net gain in biodiversity.

Other strategic objectives noted by the new policy are:

• Lead the circular economy model through the reuse of waste and efficient use of resources.
• Lead the adaptation and mitigation to climate change, achieving carbon neutrality in the sector by 2040.
• Minimize environmental effects by harmonizing the development of mining activity with the environment.

Economy

One of the sustainability axes of the policy is the economy. This aim is for Chile to be a leader in responsible, sustainable, competitive, and innovative production with world-class standards and its strategic objectives are:

• To be a world leader in the sustainable production of minerals, promoting the world’s low-carbon economy, and safeguarding the health of people and the environment.
• Generate a chain industry at the forefront of innovation and development.
• Increase the sustainable productivity and competitiveness of the mining industry.

Conclusion – How can mining suppliers use this information? 

The Chilean mining industry has an important role in the global economy as countries look to reduce their carbon footprint. As a key supplier of critical minerals such as copper and lithium, the sustainability aspects of the mining industry will increasingly become non-negotiable. The 2050 National Mining Policy has put sustainability at the forefront of its goals for the future. The document will act as guide to future governments and industry stakeholders as they develop the local mining industry in a world that is demanding that companies take into consideration the environmental aspects of their businesses.

Mining suppliers will play a large role helping mining companies to bridge the gap between where they are now and where they need to be. Suppliers will be needed to help reduce water usage in production processes, improve the economics for dewatering tailings, create cheaper and more efficient desalination plants, introduce less intrusive mining techniques to minimise disturbances on ecosystems, improve environmental monitoring, and to deliver products that can be recycled and reused in the circular economy.

All these challenges will open new opportunities for mining suppliers that will lead to new revenue sources and more jobs for the industry. The 2050 National Mining Policy is a great way for mining suppliers to find future opportunties where their skills and solutions will be needed. The next part of our series will look at the economic pillar that the country wants to develop as we move into the future. 

Ax Legal is an advisory firm that works with foreign companies in Latin America. Our team of legal and commercial advisors have a distinguished track record of helping foreign technology and services companies to grow and operate in Latin America. Over the years, we have worked with starts up, mid-size businesses, and publicly listed companies. The one common factor that connects are clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

To better understand how we can support you in the Region, please contact Cody Mcfarlane at cmm@ax.legal