Chile's Congress Says The Country Is Uneasy About The Mining Industry

Diego Hernandez, president of The Chilean mining company Sonami, noted that the COVID-19 crisis has had little impact on the mining industry, as reported by Chile's El Kurier newspaper on 6 May 2020. The situation will be contained and the outcome will be less negative. The second quarter of the year will be the most complicated period, and the situation should improve in the third quarter. The fourth quarter is expected to show similar developments to the first quarter, with mining production up 4.6%.

我n terms of the future performance of the mining industry, Mr Hernandez thinks it is difficult to forecast, but based on the information they have so far, he expects global copper demand to decline by up to 4 per cent, but to fully recover next year with growth of between 4 and 5 per cent. On the copper supply side, some plant closures in countries such as Peru and Congo could lead to a 3.3 per cent drop in supplies. 'There may be a small surplus, but it won't have a big impact on prices,' he said.

But on Tuesday, Chile's constituent Assembly began formal debate on a new constitution to replace the market-centric one that dates back to the dictatorship of General Augusto Pinochet. The text could reshape the world's largest copper producer.

我nitial plans for the nationalization of mining, the establishment of a unicameral parliament, water rights and the protection of indigenous territories are some of the more pointed motions that will be discussed and voted on in more than 20 plenary sessions of parliament.

"During this time we will see what is really preserved in the proposed constitution," said Maria Eliza Quinteros, president of the constituent Assembly. She noted that the text would face a national referendum planned for September.

The new constitution comes as Gabriel Boric, a 36-year-old leftist former student protest leader, takes office as president in March in what could mark the Andean country's most dramatic political and social shift since the restoration of democracy in 1990.

The new constitution has caused unease among investors and mining companies, challenging the country's market-oriented economic model, which dates back to economists under Pinochet's bloody military rule.

The proposals will be debated in the coming months and require approval by two-thirds of the delegates, or about 103 votes. If approved, they will face an amendment process before a second final vote to incorporate them into the final text. If rejected, they will go back to the committee for amendment or waiver.

The prospect of dramatic change in the country has raised some alarm bells among conservatives, though Quinteros sought to allay concerns, saying there was a lot of "misinformation" in the process and that the proposal was in its early stages.

But those concerns have led to some loss of support for the process, with a survey by Cadem, a private pollster, showing that the proportion of people who now intend to vote to approve the new constitution has fallen from 56 per cent to 47 per cent.

The constitutional body, elected last year, is dominated by independent left-leaning representatives, some of whom grew out of a protest movement that erupted in 2019 over inequality in one of the region's richest countries.

Kenneth Bunker, director of Tresquntos, a consultancy, said it was an important moment to raise "concerns" to avoid "outlandish" motions moving forward and undermining trust in the process. But Bunker still thinks the new constitution will eventually be approved, despite the challenges it will pose to Boris's new government.

"In the short term, if this constitution is approved, the government of Gabriel Bolik will face a real challenge in balancing The social infrastructure of Chile with the current political and economic situation," he said.