Top miners in Chile sign deal to help country’s small producers

Los Pelambres mine accounts for nearly half of Antofagasta’s total copper production. (Image: Pelambres copper mine. Courtesy of Antofagasta plc.)

More than a dozen global mining companies with operations in Chile signed a deal this week that would see them renting part of their properties to small-scale miners, which sell their output to state mining development corporation ENAMI.

Top players, including BHP, Barrick, Anglo American, Antofagasta Minerals, Lumina Copper, Freeport-McMoRan, Teck Resources, Lundin Mining, KGHM and SQM, will deal directly with ENAMI.

The body, in turn, will sublet the properties to artisanal miners, which will carry out extraction and exploration through more than 840,000 hectares in Chile’s arid and copper-rich Atacama region.

Those properties, local paper La Tercera reports, account for less than 1% of revenue global miners that signed the deal earn from production.

BHP, Barrick Gold, Anglo American, Antofagasta, Freeport-McMoRan, Teck Resources and SQM among the companies that will rent part of their Chilean assets to small miners

In early August, copper prices fell to $2.53 a pound on the Comex division of the New York Mercantile Exchange, the lowest level since 2017.

Although 93% of Chile’s copper output comes from large mines, a sharper drop in prices for the red metal could send small and medium-sized mines over the edge. Those operations generally employ up to 80 workers, but are often much smaller, while medium-sized ones have a maximum of 400.

Another issue affecting the sector in Chile is that the bulk of exploration is in the hands of major miners, as it is quite cheap for them to hold a property — only $2 per hectare for exploration projects and $5 per hectare for those already in exploration.

“Companies have no incentives to do anything with those assets, most of them brownfield projects, and that needs to change to both boost exploration in the country and let juniors in,”  Diego Hernández, president of the Chilean mining society, Sonami, and a former Codelco CEO, told MINING.COM last year.

In other places, such as in South Australia, companies have to demonstrate they are working on their properties or else risk losing them. Charles Moore, from the State’s government, warns that unfortunately there are always ways to trick the system.

“Some companies do the very minimum just to keep ownership of their assets,” Moore, who is leading the development and implementation of South Australia’s copper strategy, noted.

Data from the Chilean copper commission (Cochilco) shows that something similar may be happening in the South American nation. Of the 110 mining companies with interests in the country, 74 are junior miners with exploration projects, from which only 33 have reported some activity in the last year.