MercoPress. South Atlantic News Agency

Chile admits energy shortages to British investors

Chilean Minister of Mines and Energy Karen Poniachik promised “incentives and low risk” to all those British companies interested in investing in the Chilean mining and electricity sectors.

During a presentation this week in Canning House, London, before bankers and businessmen Ms Poniachik explained the advantages of investing in Chile with a government that "has made the energy sector its top priority".

As to the electricity sector, currently in full expansion, Ms Poniachik said the Chilean government policy has three main objectives: diversification of energy sources; a greater provision autonomy, and promotion of the efficient use of energy.

Chile imports three fourths of its energy consumption which makes the country "dependent" and "vulnerable" to price turbulences and supply interruptions.

Since 2004, Chile has suffered constant natural gas provision restrictions from Argentina which has had an impact mainly on manufacturing, since there's an agreement to ensure the supply of gas to homes.

To cut that dependency Chile is building a liquid natural gas processing plant in Quintero and is considering a second plant further north in the country where most of the copper industry is located.

Ms Poniachik also mentioned the "big opportunities" for investors in the Region of Magallanes where the government is developing a natural gas production pole.

The Chilean minister told the British audience that recently approved legislation offers incentives to investors regarding "price stability", which ensures benefits during several years for the initial investment.

Poniachik underlined investment requests also have a "quick and transparent" process since Chile's goal is to double the current energy supply of 12.000 Megawatts by 2020.

Further more since most of the projects approved so far are scheduled to begin producing by 2010, a transition period until then exists and Poniachik invited investors to participate in the setting up of turbines to support the current energy supply.

Chile has to basic grids, one central (covering metropolitan Santiago) which runs mainly on hydroelectricity and the North one which is powered with natural gas, and according to minister Poniachik, "preferential conditions" are to be granted to those companies involved in renewable energy projects.

As to nuclear energy, Poniachik said it was not an option for the current administration since Chilean president Michelle Bachelet made it one of her electoral promises.

Finally as to mining, Eduardo Titelman from the Chilean Copper Committee said that what is lacking is "research and exploration" of new deposits.

"Chile has Latinamerica's most consolidated mining sector and ample advantages for investors", added Titelman.

Among the advantages he mentioned Chile excellent mining potential (38% of the world's known and proven copper reserves); qualified manpower and a favourable legal framework which respects private property, contracts and the property of mines is guaranteed by the country's Constitution.