Collahuasi permit setback jolts Chile copper sector

A Chilean environmental court has annulled a key permit for the $3.2 billion (C$4.4 billion) expansion of the Collahuasi copper mine, throwing fresh uncertainty over one of the world’s largest copper operations and highlighting rising regulatory risks for major mining projects in the country.

Chile’s Second Environmental Court overturned the environmental authorization for the project’s desalination plant earlier this month, citing concerns over impacts on Indigenous communities and the surrounding marine environment.

The ruling forces the Environmental Assessment Service (SEA) to reassess parts of the project, including the seawater system designed to pump desalinated water nearly 200 km inland to the mine at roughly 4,600 metres above sea level.

Collahuasi, owned by Anglo American (LON: AAL), Glencore (LON: GLEN) and a Japanese consortium led by Mitsui, is the world’s sixth largest copper mine. The operation produced more than 404,000 tonnes of copper last year.

The expansion project is intended to extend the mine’s life by two decades and reduce dependence on continental water sources. Contractor Techint completed the pumping system in April, allowing water to travel from the Pacific coast to the high-altitude operation.

“Based on the information currently available and subject to the existing alternative water sources for Collahuasi, Anglo American does not currently expect any immediate impact on production,” the company said.

Glencore issued a near-identical statement, adding that the mine is seeking clarification from both the tribunal and the SEA on the scope and implications of the decision.

Permitting pressure

The ruling has intensified criticism from Chile’s mining sector, which argues the country’s permitting framework has become increasingly unpredictable even for projects that have already undergone years of environmental review and Indigenous consultation.

Manuel Viera, president of the Chilean Mining Chamber, has pushed for reforms to permitting and environmental assessment systems that companies say have slowed approvals and raised costs. Viera told MINING.COM the permitting regime was “cursed,” noting that a single mining project can require more than 500 permits over several years before construction can begin

Desalination projects have become central to Chile’s mining sector as producers move away from freshwater use in the drought-stricken Atacama region. The infrastructure, however, remains expensive and politically sensitive because of marine impacts, high energy demand and the technical challenges of transporting water to high-altitude mines.