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Bachelet pledges mining reforms, including royalties, to help finance programs

Wednesday, August 14th 2013 - 19:24 UTC
Full article 5 comments
Chile has boomed for a decade on copper and candidate Bachelet wants a more balanced economy Chile has boomed for a decade on copper and candidate Bachelet wants a more balanced economy

Chile's presidential frontrunner Michelle Bachelet says she is studying possible changes to mining policy in the world's top copper producing country. The possible changes include altering mining royalties and funding programs for state-owned mining company Codelco.

Meeting with foreign correspondents Bachelet said that she'll be able to release more details of her plan after a review is completed at the end of August. Copper alone accounts for roughly a third of government revenue and over half of the country’s exports.

Bachelet said Chile's economy continues to grow due to the red metal but must improve its productivity. She also said Chile must strike a better balance between growth and the preservation of the environment.

The former president (2006/2010) said that some economists have told her that the Chilean economy can sustain 5% growth in 2014, which would enable her government, if elected, to support the education and tax reforms promised in her program.

“The economists with whom I have met believe it is highly probable that next year tendencies: be it for the price of copper as the expansion of the economy can sustain 5% growth” said Bachelet.

“With these percentages it is perfectly possible to implement the education and tax reforms, which is also needed to help better balance the overall economy”, she added. 

The Chilean economy in 2011 expanded 5.9% and last year, 5.6%, while in the first quarter of 2013, at 4.1%. Chilean central bank surveys indicate the economy should expand 4.3% in 2013 and 4.5% in 2014. The international price of copper averaged 3.99 dollars a lb in 2011; 3.60 in 2012 and 3.36 so far this year.

“Chile has grown, but much of it is because of the good tail winds for copper prices. We need to improve productivity, diversification and solve the great challenge of the energy issue”, said the former UN Director of the Woman Office.

With the tax reform Bachelet plans to collect by the time it is fully implemented in four years 8.2bn dollars annually, and with the resources finance among other things making education free and universal, in a horizon of six years.

Regarding energy, Bachelet recalled that when she took office (2010) there was scarcity and “we had to take measures enabling coal thermoelectric plants”, which were not the ones “we would have liked to have”.

As to the large mining and energy projects, motive of ongoing controversy, Bachelet said her government created an institutional framework for environment issues, including a ministry, a super-agency and a new system of assessment and tribunals for cases referred to the environment.

Bachelet is widely expected to win the November 17 election or a possible runoff on December 15.  

In related news Chile's weakened conservatives finally united behind former Labor Minister Evelyn Matthei over the weekend.

“We have been very successful over the last 30 years. Truly, we are a Latin American country that has progressed consistently during the last 30 years and in a consistent manner have come closer to the developed countries. We want to be a developed country”, said Ms Matthei on her proclamation speech.

An economist known for her blunt style, Matthei is a seasoned member of the Union Democrata Independiente (UDI) party and is expected to give favorite Bachelet a strong challenge.

Matthei says she is against free education, but with Bachelet agree on wanting to legalize abortion in some cases and reform the dictatorship-era constitution.

Categories: Politics, Latin America.

Top Comments

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  • Condorito

    As long as Mami limits herself to “studying” possible changes we are ok... or is she going to surprise us with plans to privatize CODELCO?

    Aug 14th, 2013 - 08:07 pm 0
  • Anglotino

    Sounds like there is a lack of shallow, quick fixes on offer!

    Looks like Chile might win either way.

    Aug 14th, 2013 - 08:18 pm 0
  • ChrisR

    But the 15.78% drop in revenue for copper in just over two years hasn't been matched by a 16% drop in the cost of winning the ore and processing it I bet. Any idea what the gross margin was in 2011? A hell of a lot better than now is the answer.

    All politicians promise things and most never deliver, especially when half of the exports are tied to something, the revenue of which, is dropping like this.

    Trouble is the electorate of all countries love “bread and circuses”.

    Aug 15th, 2013 - 11:26 am 0
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