Future of Dominga mining-port project in Chile depends on new political committee

This is an automated translation of the story written in Spanish

Uncertainty will remain over the future of the US$2.5bn Dominga mining-port project, belonging to Chilean company Andes Iron, until a panel made up of undersecretaries from six ministries decides on its development in the Coquimbo region.

The board was announced on Friday by the Comptroller General of the Republic after a committee of ministers, which had already rejected the initiative in 2023 due to alleged technical deficiencies and impacts on marine and environmental biodiversity, disqualified itself from reevaluating the initiative.

The committee made the decision at an extraordinary meeting held at the end of December, after learning that an environmental court in the Antofagasta region had annulled the ministers' refusal to allow Dominga to go ahead.

In addition to deeming it illegal, the court emphasized that the objection by the inter-ministerial council, led by the Environment portfolio and made up of the heads of Health, Economy, Agriculture, Energy and Mining, contravened a 2021 approval granted by an environmental evaluation commission of Coquimbo.

The national environmental regulatory service SEA, for its part, filed an appeal with the Supreme Court to defend the legality of the group of ministers, an entity that is part of its examination processes, and to annul the ruling of the environmental court.

The problems surrounding the lengthy Dominga process, which involves the extraction of copper and iron from two mines in the commune of La Higuera, in addition to operating a seawater desalination plant and a shipping terminal, have been considered a basic example of the SEA's inefficiencies.

Dominga's environmental impact assessment report was submitted to the regulatory body more than a decade ago, becoming emblematic of the complexities of the national system.

Francisco Corona, a mining lawyer and founder of law firm Corona Abogados, told BNamericas that the permit system is one of the main bottlenecks and a source of uncertainty for investors.

In order to put an end to the potential cases of 'judicialization' that "affect the competitiveness of local mining compared to more efficient jurisdictions and to address the discretionary power that benefits no one," Corona believes it is essential to apply technologies to increase the efficiency and rigor of rulings.

"Any attempt at modernization will be insufficient without the application of advanced automation and artificial intelligence to analyze probabilities and statistical data obtained from existing operations. This would facilitate informed, agile decisions and reduce discretion in decision-making," he said.

The former director of mining and natural resources at the law firm Carey emphasized that the current situation of the SEA "does not necessarily require a legal modification, but rather a great deal of will and rigor to predict the environmental and social impacts" in order to gain in technicality, impartiality and streamlining.

An aspect that is in line with the interest of Andes Iron, whose company promises a 5.0 mining initiative with a strong seal of sustainability and advanced technologies, as indicated in a statement where it assures to have the support of multiple organizations, both at regional and national level.