Chilean president calls for permitting system reform to unlock projects

President Gabriel Boric has once again called for a long-awaited reform of Chile's permitting system to unlock projects.

“It is irrationally an obstacle to development as it is currently conceived,” he said during the annual meeting of the national chamber of commerce (CNC), held on Tuesday in Santiago.

Criticisms have been made from various economic sectors, including the mining industry, about the cumbersome and lengthy permitting process, which they say is hindering the arrival of new investments.

If a consensus is not achieved, “growth will continue to stagnate,” Boric said regarding the country-level agreement required to modernize the system and in response to comments by CNC president José Pakomio that “we need the State to be our partner and not our enemy.”

The changes to the permitting system in Chile involve three key aspects: modernization of how sectoral permits are granted, the environmental impact review service (SEIA) and the mining concession system.

However, the president stressed that modernization will not mean lowering environmental standards, but rather “being more efficient in a system that is not currently efficient,” with the objective of reducing permit processing times by at least 30%.

Boric asked for the collaboration of congress to work on a bill to make the changes as soon as possible. Some progress was made last week when the council of ministers for sustainability and climate change approved a proposal to reform the general environmental framework law (law 19,300).

The bill seeks to make the institutional framework more efficient, including improvements to the citizen participation stage, environmental management through agencies such as SEIA, and resolution of uncertainties that concern both communities and investors, according to a statement issued by the environment ministry in mid-November.

It also includes reducing any political bias in procedures by eliminating the committee of ministers and the environmental assessment committees (COEVA), and having more technical and scientific aspects in the permitting process. The proposal would also add a voluntary procedure for early dialogue between project owners and communities.

In his speech, Boric also mentioned the contribution of mining investment in the last monthly economic activity index (Imacec) released by the central bank. The figures for September showed 4.3% year-on-year growth in the production of goods due to a 6.3% increase in mining.

The president said that "one of the reasons why mining investment began to take off is because the uncertainty that existed regarding the royalty was cleared up," underscoring that in addition to recent investments announced in Chilean lithium mining, countries such as Japan, South Korea and the US, as well as European nations, have shown interest in injecting capital into the mining industry.

He added that the situation should be even more positive next year as the economy is expected to grow 2.5% in 2024, while annual inflation is forecast to be 3%, according to the central bank.

Regarding the permitting times for mining projects, Cristián Cifuentes, senior analyst at the Cesco copper studies center, said that while “the world average is 15.7 years, Chile is at 17 years.” 

Chile is the world's leading copper producer, but its share of global production has slipped from 36% in 2003 to 24% at present.