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untune that string and hark

The bottom line to the Rio2 EIA permitting issue

Fact: Chile is a sovereign state, it gets to be the country it wants to be, we on the outside respect that.

Fact: Chile has been the pre-eminent mining jurisdiction in Latin America for decades, in fact one of the most mining-friendly countries in the world, with clearly established rules and legislation that allows fair treatment for all sides.

Op-Ed: If Chile wants to change its status as a country that welcomes and benefits from mining, it can do so. When Chile’s environmental body, the Servicio de Evaluación Ambiental (SEA), recommended against the permitting of Anglo’s Los Bronces mine recently, it caused plenty of debate and grumbles in the wider mining circles outside of Anglo itself. However it was one case, arguably an isolated one with its own issues and ultimately, not enough evidence to suggest that the country’s mining industry was about to be stymied by the arrival of more radically green leadership in a specific and key government bureau. However, the decision taken by SEA on June 22nd regarding the Fenix project owned by Rio2 Ltd (RIO.v) now paints the SEA in a different light.

We know that mining causes environmental impact. In fact all human activity changes the circumstances of the environment, but mining’s impact can be highly negative if not controlled and therefore, rules and regulations are in place to control said impact. It is, at the most obvious and basic level, why companies need to apply for and obtain permits to operate mines. The impact of mining is never zero, the rules are there to mitigate and not eliminate the changes (or “damage” if you must) and are a trade-off against the benefits that the mine operation or project offer. In the case of Rio2 Ltd (RIO.v) at Fenix, the company has checked the boxes and been given the thumbs-up for all the major environmental issues regarding the project, including air quality, water use, land change, building, noise contamination and the list goes on. This case is not about the potential for air quality contamination that would potentially affect nearby towns and the lungs of people or animals as at Los Bronces, here we are talking about the only location around the project where 19 chinchilla chinchilla were spotted and studied, a kilometre or so to the West. The SEA agrees that these animals will not be unduly disturbed by the project, but in its wisdom has decided that RIO.v now needs to study a different area 500m or so closer to the project to see if there are more animals living there and if so, would they lose the vegetation they feed upon if the project went ahead.

And that’s fair enough! As stated, if Chile wants to stop this project from going ahead for this reason, as well as concerns that a migratory route for six vicuña may be partially blocked by the company’s planned construction in nearby valley, then Chile has the right to do that. However, the country cannot have its cake and eat it because if this project is red-lighted by Chile’s Council of Ministers on July 1st for these reasons, the mining industry will receive the message loud and clear; “You new guys are going to stop our projects from going ahead and you’ll find an excuse to stop them, no matter what.”

As stated yesterday, Rio2 at Fenix is a small junior mining company with a modest project in mining terms, certainly nowhere near the impact produced by any world-class porphyry copper project of the type constructed and operated by BHP, Anglo American, Rio Tinto or any of the other big-name, multi-billion dollar world mining concerns. However, be in no doubt that all the majors working in Chile are watching this case like hawks because from out of nowhere (or left-field, if you’ll pardon the pun) it has become a test-case that will measure the real intent of the Boric government toward the industry, actions speak louder than words. With the greatest respect to that small family of chinchilla chinchilla who live next to the Rio2 Fenix project area, if Chile is willing to knock back a project that’s been elaborated to the highest standards and passes all other environmental measures for this small reason, it will stop any project from going forward. The bottom line is that on July 1st, Chile under Gabriel Boric decides whether it wants to retain its mantle as the top LatAm mining country.

14 Comments

    Thank you for the update. My stink bids got filled. Not sure if that is good or horrible.

    Reply

    thanks for your informative posts

    Reply
    A Beaten Down Prospectors Cabin In The Woods The Deep Dark Woods of British Columbia 24/06/22 11:35 am

    Does RIO have their own little nursery thats propagating local fauna? … if i was on the RIO BOD i’d be pounding the table on a nursery and a local planting program for the little critter-folk to munch/live on …. like what Aurania Resources is doing in this video;

    https://www.youtube.com/watch?v=gwpg34H5OqU

    Reply

    Thank you for these updates on Rio2, sir.

    How can I send you an email, there’s something I think you should see?

    I assume the automatic email which does the mailing list is a no-go?

    Reply

    Shouldn’t it be possible to build a new habitat for the chinchillas in close proximity to the old one should it be threatened by any mining activity? I find it hard to believe that they would stop the mine from being built due to a potential issue, not proven and not an issue according to regional authorities, with the current habitat.

    Reply

      It’s not about chinchillas.

      Reply

        Ok, I’ll bite. What is it about, then?

        Reply

          If the chinchillas fail it’ll be about turtles. It’s about no mining, or maybe no mining unless owned by the State.
          The vote was just the first shot across the bow. The salami approach can take years but committees don’t give up.

          Reply

            In other words, the point I made above. What matters is the vote this Friday July 1st, at that point we’ll know. However we do know today that the ideology at SEA is not the ideology of Chile, one look at the way the Constitutional Assembly developed tells us that.

    Investors have been warned. You could sink millions of dollars in a mine, only to have its permit arbitrarily denied by the SEA. The damage has been done.

    Reply

      The SEA doesn’t award or deny the permit, it makes its recommendations. Permitting is in the hands of the committee that’s due to sit on July 1st.

      So Chile hasn’t made its choice yet, but if the committee denies the permit then your point is correct.

      Reply

    Thanks Otto for providing the background info.
    Provided there’s no politics at work, this seems to be a minor issue that could easily be resolved and I imagine the company has already worked up undertakings that they can put on offer for the July 1 meeting.
    The problem is that the issue could have easily been dealt with before SEA issued their opinion so it looks like games are being played behind the scenes.

    Reply

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