Ministers reject Chile's controversial Dominga mining-port project

Andes Iron claimed “political intervention” was behind the rejection on Wednesday of its US$3.5bn Dominga mining-port project in Chile’s north-central Coquimbo region by the committee of ministers in charge of resolving the issue.

The company said it will appeal to the environmental courts to overturn the administrative decision, according to media reports.

"More than a technical decision, the determination seems to be the fulfillment of a commitment assumed during the presidential campaign," said Jorge Riesco, president of mining association Sonami, in a statement.

“In effect, some of those that voted have issued opinions publicly against the project, which sets a bad precedent,” added Miguel Zauschkevich, president of Chile’s mining chamber, in a release.

After being elected at the end of 2021, President Gabriel Boric said there would be no more so-called sacrifice zones under his government.

"We do not want projects that destroy our Chile, that buy and destroy communities ... No to Dominga," Boric said at the time.

According to a statement from the environment ministry, the reasons for the unfavorable ruling were based on the effects that the copper-iron ore project would cause to marine life, protected areas, the human environment, water resources, tourism and emissions.

Environment minister Maisa Rojas told a press conference there were risks of contamination that the desalination plant could cause in ocean waters and aquifers, and the mine in terms of air quality and emissions of particulate matter.

Following the decision, economy minister Nicolás Grau announced an eight-year plan for 580bn pesos (US$704mn) for the local La Higuera municipality and its surroundings.

The decision by the committee of ministers was also blasted by the association of industrial mining suppliers (Aprimin).

"We have stated many times that decisions about whether or not a project is carried out must be based on exclusively technical and not political reasons, whether a project is approved or rejected," said its executive director Sergio Hernández in a release.

Despite having been approved in 2021 by the first environmental court of Antofagasta and by the environmental evaluation commission of Coquimbo region, the committee made up of the environment, economy, health, agriculture, energy and mining ministers accepted 12 of the 26 complaints that were filed against Dominga.

The project, which has been a subject of controversy for years, is designed to produce 12Mt/y iron concentrates and 150,000t/y of copper concentrates over 22 years from two open pits, and generate over 40,000 direct and indirect jobs in the different phases of construction and operation.

Environmentalists say that if the government had approved Dominga, the marine biodiversity of the Humboldt Archipelago would be threatened.

Chile has a portfolio of mining investments for more than US$70bn and the country needs to resume the path of economic growth, said Sonami’s Riesco.