Chile wants to increase copper smelting without jeopardizing environmental goals

May, 26, 2022 Posted by Gabriel Malheiros

Week 202221

Chile, the world’s largest copper producer, seeks to strengthen its domestic smelting capacity through public-private partnerships, with investments in state-owned plants and new technologies.

The new government of President Gabriel Boric is working on a project to upgrade the Paipote plant, run by state-owned Enami, and is interested in modernizing other foundries built decades ago, Mining Minister Marcela Hernando said in an interview. She said the “ideal” would be for Chile to invest in its seven currently operational plants.

This is Chile’s latest attempt to extract more value from its supply chain at a time when the pandemic and the war in Ukraine have accelerated the fragmentation of traditional trade ties and spurred efforts to foster local industries, especially those involved with cleaner energy strategies.

One of the arguments for exporting less semi-processed copper concentrate and more refined metal is transportation savings — both financial and environmental.

However, boosting local processing requires large investments as well as increased energy consumption and emissions. Moreover, doing this so far away from Asia’s and Europe’s demand hubs can be difficult, especially since China has plenty of spare capacity.

The government, which took office in March, is exploring other initiatives to extract more metal from waste. For example, possible public-private partnerships would support existing research and development initiatives, as well as efforts to introduce technology that already exists in other parts of the world, she said.

Mining companies have been slow to invest in research and development in Chile, focusing their efforts abroad, said Marcela. As a result, the state should play a role in accelerating spending, for example, by creating a national lithium company that leads the way in environmental practices, she said.

According to the minister, Chile is also in talks with Argentina and Bolivia about ways to add value to their mining industries, particularly lithium, with Mexico recently joining the talks.

Source: Valor Econômico

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