At this year’s PDAC convention, the Investing News Network had the chance to talk to Chile’s mines minister, Baldo Prokurica.
At this year’s Prospectors & Developers Association of Canada (PDAC) convention, the Investing News Network had the chance to talk to Chile’s mines minister, Baldo Prokurica.
Watch the interview above for more from Prokurica or read the transcript below. You can also click here to view our full PDAC 2019 interview playlist on YouTube.
INN: We are here at PDAC, where Chile will announce new exploration projects in the country. What are some of those projects and are you focusing on any particular metals?
BP: We’ve made a special effort, together with Chile’s committee, our team, to publish a book where you can find the full 32 mining projects and, in particular, the ones related to electromobility. We have four lithium projects, two cobalt projects and, of course, copper projects, which we believe are the three metals key to electromobility.
INN: Let’s then talk a bit about the lithium space. Most of our audience is investors — why should they choose Chile as an investment destination instead of other countries in the Lithium Triangle such as Argentina or Bolivia?
BP: Instead of competing with our neighbors, what we really want to do is address this electromobility challenge as a new component for mining around the world. Moreover, as we have said many times, we want to jump into the value-added chain. I have this chart that I would like to show you. We are the world’s second-largest lithium producer; we have salt flats, and we would like to get as close as we can to the manufacturing of batteries and the manufacturing of elements to store energy, which we believe could create more revenue, more jobs and more opportunities for Chilean families.
INN: Chile is said to be focusing more on sustainability in mining. What are some of the challenges to achieving that goal?
BP: As everyone knows, traceability in exports around the world is evident and strictly followed so that not every product that is in the market can be bought unless it’s meeting certain basic requirements. We believe we can grow in that area to eliminate the ghosts who say that mining contributes to pollution, mining disputes water resources with agriculture and many other things.
In that area, we have two initiatives that I want to tell you about. The first one is green copper, which Codelco Chile has signed. Codelco is a state-owned company that has agreements with other state-owned companies to produce high-purity copper and also has bulletproof traceability. In addition, the country’s mining company, which is also a state-owned company, will get 100 percent of its energy from renewable sources starting in 2020.
INN: How are you working with mining companies, and what steps are you taking to ensure the country’s new water regulations are implemented successfully?
BP: Chile’s mining industry is one of the mining industries that has made efforts to properly use water. In fact, the Dirección General de Aguas [Chile’s water authority] acknowledges that mining only uses 3 percent of our inland waters. Chile’s mining industry is the only economic activity that today has desalination plants to extract water from the Pacific, to pump it 3,000 to 4,000 meters high, and the challenges today are about how to use the water resource better. In fact, there are miners that are reprocessing almost 76 percent of the water they use, and I believe that can be improved even more.
There are no changes in legislation right now, but I think in the future we might have changes with the purpose of making water use more efficient. We believe mining is one of the economic activities that has made efforts in this area, and that’s why 99 percent of the new projects in copper mining are linked to a desalination plant.
INN: Some of the projects that you will be presenting here at PDAC are cobalt projects. Do you think Chile has an opportunity in that space in the future?
BP: Well, as we discussed, traceability has become an essential part for mining companies, and you can find cobalt in many places. In Africa in particular, and in other places, but in those countries traceability is not compatible with the requirements that the global market, in particular western markets, are demanding from mining companies. This is why the cobalt mines and tenements in Chile are in the spotlight, and we are promoting investments from companies in cobalt mines so that this element, which is key to lithium-ion batteries because it helps them maintain the correct temperature, can be marketed and included in foreign investments in our country.
INN: Chile is definitely a leader in copper mining. What are some of the challenges that the country has right now to develop projects in the sector considering the current state of the market?
BP: I think that one of the challenges Chile has is being able to develop new projects with elements that could differentiate it from other countries. Others include having green copper and being more productive; we still have to improve our productivity, even though we have examples of mining projects that work at 4,500 meters above ground and are working grades of 0.25 percent. We still have challenges such as leaching sulfates, which is a very important challenge to avoid other elements. We have the challenge of being able to export Chile’s mining services. We believe in the potential of companies that offer services. These companies, which are small, medium and large, are currently offering services in Peru, but we also want to go to Mexico, Canada and Australia.
INN: Finally, what are your specific goals this year for mining in Chile, and what are some of the challenges to achieving them?
BP: This year, we are making a very important effort, in terms of tailings, to work on three fronts. First of all, reprocessing tailings, which are from very old mines, from when grades were better and the technology was not as advanced. We are making proposals to different companies, both national and foreign. We have a very good experience with a Canadian company, called Valle Central, which is working at Codelco Teniente. In addition, we are going to make our tailings safer. We will have surveillance starting in June; we will be monitoring Chile’s tailings and we will have a method to make tailings more friendly.
We believe that, in general, in the history of mining, tailings have been seen as the back door in this business, and I believe there are very dangerous examples, such as what happened in Brazil, which we cannot repeat. Chile is a country that hasn’t had this type of accident, and our technicians, engineers and geologists say that our tailings are very different and safer, but we need to improve our standards even more so that we can give the local communities safety and certainty that an accident will not happen in mining areas.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.