Chile Forum

The royalties and taxes ... will help pay for the social services for the unemployable and chronically unproductive philosophers of the local Juventudes Comunistas de Chile.

hlf2888 wrote:Nuclear and earthquakes sounds like a disaster in the making. Surely they have learned from Japan.

faceandvoice wrote:The best option for Chile involves Solar in the North and Hydro in the south.

Chile top court rejects $5 bln Castilla power project

* $5 bln, 2,100-MW thermoelectric plant struck down
* Project can be resubmitted, supreme court says
* Environmental groups blast controversial coal project
* World No.1 copper producer struggling with power woes

SANTIAGO, Aug 28 (Reuters) - Chile's top court rejected the
planned $5 billion Central Castilla thermoelectric power plant
on Tuesday, citing environmental reasons in the latest setback
for a mega power project in the world's largest copper-producing
nation.
The decision on the planned 2,100 MW plant, a joint venture
between Brazilian billionaire Eike Batista's MPX Energia SA
and Germany's E.ON, comes as Chile
grapples with energy woes and steep power prices. MPX and E.ON
both declined to comment.
The supreme court said the joint venture could resubmit an
environmental impact study that considers both the port and
thermoelectric central projects together, potentially leaving
the window open for the energy complex to see the light at a
later date.
Castilla could "harm the constitutional guarantee that one
can live in an environment free of pollution," the court said,
citing a lack of information about the unity between the two
projects as well as irregularities in land-use qualifications.
Environmental groups have opposed mega-power projects
ranging from coal-fired, thermoelectric plants in Chile's
northern Atacama, the world's driest desert, to hydropower dams
in the wild southern Patagonia region. The Castilla case was
seen as a litmus test for several other environment versus
energy disputes.
While mining helped Chile's economy grow 6 percent last
year, the Andean country has the highest level of income
inequality among the 34 OECD countries, according to a report by
the body last year, and many feel a copper-led boom has bypassed
them.
Castilla's rejection is also a blow to Brazil's Batista, who
is facing tumbling confidence among investors in his energy and
mining conglomerate.
More than $22 billion and over 8,000 megawatts in energy
investment in Chile have been suspended, according to Libertad y
Desarrollo, a conservative Chilean think-tank.
Castilla was planned in Chile's mineral-rich Atacama region,
with the goal of providing energy to the booming mining area.
Cerro Casale owned by Barrick Gold and Kinross
, Lumina Copper's Caserones mine and Barrick's
Pascua Lama mine are gearing up to operate in the surrounding
area.
"Miners are really going to deplore this... Various projects
in the (region) are somewhat fragile," said Ronald Guzman,
mining professor at the Universidad Catolica in Santiago.
"They're going to seek new sources of energy... I think
Argentina and Bolivia could appear as good sources."

Years of under-investment, a destructive 8.8 magnitude
earthquake in 2010, droughts and the country's long, thin shape
have debilitated Chile's power grid, drawing increasing fire
from energy-intensive mining firms. Chile's power matrix has a
capacity of 17,000 megawatts and the government aims to add
another 8,000 megawatts by 2020.
Energy problems, as well as dwindling ore grades, regulatory
setbacks and extreme weather are seen threatening an estimated
$100 billion in mining investment by 2020.
"We have to see if the company decides to resubmit the
project, but clearly even if it does resubmit the project, it
delays the project which means future demand will have to be
satisfied by other sources," said Andrew McCarthy, electricity
sector research analyst at Banchile Inversiones in Santiago.
A spike in lawsuits against key energy projects is
increasing already steep power prices and inhibiting investment,
deputy energy minister Sergio del Campo told Reuters in an
interview in June.
Violent protests against mining projects are increasing in
neighboring Peru and Bolivia, where many citizens feel they have
not benefited from metals-led economic growth but have suffered
environmental costs.

CHILE PEOPLE POWER WINS AGAIN
A handful of fisherman and artisans from the tiny village of
Totoral in northern Chile had opposed the Castilla project on
environmental and health grounds, saying the coal-fired plant
would harm air and water quality.
The supreme court unanimously upheld an appeals court ruling
against the Castilla power plant earlier this year.
If Castilla resubmits its project, it would have to explain
the transfer of coal and petrol from its port to its plant, the
court added. The port and plant projects had been submitted
separately.

nwdiver wrote:What you are missing mister paradigm shifter is it is not the job of government to be in the energy generation business and tidal and many other paradigm shifting technologies have been tried tested and rejected as not possible “today”, so whats left, hydro or thermal and conservation. Oh, I use 90% wind and PV, but its not for everyone. I don't need Google to understand entropy.

greg~judy wrote:~

Chile top court rejects $5 bln Castilla power project

* $5 bln, 2,100-MW thermoelectric plant struck down
* Project can be resubmitted, supreme court says
* Environmental groups blast controversial coal project
* World No.1 copper producer struggling with power woes

SANTIAGO, Aug 28 (Reuters) - Chile's top court rejected the
planned $5 billion Central Castilla thermoelectric power plant
on Tuesday, citing environmental reasons in the latest setback
for a mega power project in the world's largest copper-producing
nation.
<snip>

Mining Investment Won’t Switch from Chile to Peru

SANTIAGO, Apr 2 2013 (IPS) - The Chilean government has warned of the potential flight of mining and energy investments to Peru because of court rulings that have paralysed large-scale mining projects in the north of the country. But this fear is unfounded, at least in the short term.

Peru and Chile are in the top ten world destinations for investment in non-ferrous metal exploration, according to the Metals Economics Group, which collects information about the industry. In its 2013 report it places Chile fifth and Peru sixth, while Latin America heads the ranking of regions, receiving 25 percent of exploration investment capital.

Chile is the world’s top producer of copper and the country with the largest reserves for future extraction.

Mining investment is concentrated mainly in the north, near the borders with Peru, Bolivia and Argentina, where mines are estimated to consume 80 percent of the area’s electricity.

Against a backdrop of rising energy demand, industry owners have expressed concern about several court rulings and administrative decisions against mining projects.

One high-profile case was that of the Castilla plant, a project of the MPX Energia company owned by Brazilian billionaire Eike Batista, that was to be the largest coal-fired generating plant in South America.

The Supreme Court ordered a halt to the Castilla project in September after the community of Totoral, close to the planned site for the thermoelectric plant in Atacama region, 810 kilometres north of Santiago, filed for an injunction against it.

The ruling against Castilla was apparently the last straw for Batista’s troubled investments in Chile, where his empire is in crisis due to capitalisation of his companies based on market expectations of potential projects that have not been realised.

Six months after the court decision, MMX, another of Batista’s companies, announced that it was abandoning an iron exploration project that was at the geological mapping stage.

MMX said that problems with energy supply would drive up the cost of investment and make the project “less attractive.”

That was when Economy Minister Pablo Longueira said the “painful” decision by MMX must make Chileans aware that “Peru is a market that is becoming increasingly attractive for mining development.”

But according to Lucio Cuenca, the head of the Latin American Observatory of Environmental Conflicts (OLCA), Longueira’s statements are “fictional blackmail” because “Chile, with its strong institutions and its mining and environmental policies, is still the main attraction for mining investment at the international level.

“Of the 320 billion dollars projected to be invested in Latin America from now until 2020 (according to industry estimates), one-third is forecast to be targeted to Chile,” he told IPS.

However, if investments in the electricity sector are delayed, Chile “could end up with a rather limited and expensive energy supply, so that it is not surprising that investments that could have been made here should shift elsewhere,” said economist Jorge Rodríguez Grossi, who served as energy minister in the government of former president Ricardo Lagos (2000-2006).

But in Peru, opposition by indigenous communities to different extraction industry projects creates an “unfavourable” climate, he added.

Marita Chappuis, former director of mining in Peru’s ministry of mines and energy and currently a consultant on the industry, does not believe that mining companies will move from Chile to other countries, “because the problems are basically technical and can be solved, whereas in Peru the problems are predominantly social.”

In this area, “Peru is not a threat to anyone,” she told IPS.

Although there have been no court decisions freezing mining investment in Peru, social protests have succeeded in shutting down mines. Chappuis mentioned the Conga gold mining project, an extension of the Yanacocha mine owned by the U.S. Newmont Mining Corporation, which was planned for the northern region of Cajamarca.

“Protesters succeeded in paralysing a 4.8 billion dollar project whose permits had already been approved and which was under construction. That had never happened before,” she said.

Javier Aroca, a lawyer who worked for over a decade as the coordinator of Oxfam International’s Extractive Industries Programme in the South America region, believes Peru is prepared to receive more foreign investment because the government actively foments it.

The greatest obstacle is “resistance movements against new mining and oil and gas projects in areas where there was no tradition of extractive industries,” he told IPS. “People do not want these industries because they fear losing their livelihoods.”

Social and environmental regulations are stricter in Peru. So when it comes to regulatory frameworks, “extractive investments in Chile have a more favourable environment, which I think is absurd,” he said.

According to researcher José de Echave, former deputy minister of environmental management and a member of the Peruvian NGO CooperAcción, both countries are still attractive to investors.

If a company employs bad practices in Chile, “the authorities in Peru will not necessarily be apprised of its record, which could indicate what kind of relations it would have with the local population,” he told IPS.

In short, said OLCA’s Cuenca, the basic problem faced by the mining industry on both sides of the border is community and social resistance.

“Peasant and native communities, and others, are blocking the foreign investment strategy in the sector of non-renewable natural resource extraction,” he said.

It would be worth analysing why investment projects wind up being disputed in court, said Rodríguez Grossi, who is now dean of the Faculty of Economics at Alberto Hurtado University.

In Chile, zoning laws must be overhauled so that specific areas are established for waste treatment and noisy or dangerous industries, in order to avoid affecting local people, he said.

But in Cuenca’s view, that would not be enough. The mining and energy industries “fuel a highly profitable process of economic growth involving foreign investment. But at the same time they create a lot of problems in the areas where they operate, and local people experience this and are aware of it.” That is why, he concluded, “opposition will continue.”