SANTIAGO, Chile (AP) — Presidential front-runner Michelle Bachelet, who is campaigning on a promise to reduce income equality in Chile, said Tuesday that she is studying changes in mining policy for the world’s top copper-producing country.
Bachelet, a former president who is widely expected to win the Nov. 17 election or a possible runoff, did not provide concrete details, but she said her team is reviewing mine royalties and ways to finance state-owned mining company Codelco.
Chile raised royalties on mining companies to help fund reconstruction efforts following a devastating 8.8-magnitude earthquake in 2010 that cost the country $30 billion, or 18 percent of its annual gross domestic product.
The government this year allowed Codelco to retain $1 billion of its 2012 profit to help fund an ambitious $27 billion investment program to boost production. The state miner had hoped to get more for its spending program, which includes turning the world’s largest open-pit copper mine into an underground operation.
“We’re reviewing all the necessary instruments,” Bachelet said during a news conference with foreign correspondents. “I can tell you more about this after August, when we’ll receive different proposals and we’ll look at all options to choose the best one.”
Mining offers Chile’s poor their best shot at a middle-class life, especially in the rugged desert areas in the north, where most mines are. Copper accounts for about a third of government revenue, and the state has a policy of shoring up national reserves during periods of high prices.
Bachelet said Chile’s economy continues to grow on the back of copper but must improve mining’s productivity and strike a better balance between growth and the preservation of the environment.
“If Chile aspires to become a developed country it needs to be able to develop with energy, of course,” Bachelet said. “But we also need to aspire to be a modern country, and that doesn’t mean just having a so and so GDP, but also a better relationship between the economy and the environment.”
Bachelet said Barrick Gold Corp.’s $8.5 billion Pascua-Lama mine must adhere to Chilean regulations before a decision can be reached on whether it should be allowed to continue.
Chile’s environmental regulator blocked the mine straddling the Chile-Argentina border in May and imposed its maximum fine on the world’s largest gold miner, citing “very serious” violations of its environmental permit.
Pascua Lama was also halted by an appeals court after members of the Diaguita indigenous community, who live downstream from the mine, complained that the project threatens their water supply and pollutes glaciers.
“It could be that the institutionality just wasn’t strong enough, or that there wasn’t enough oversight, or that the communities weren’t listened to as soon as they should have,” Bachelet said.
Bachelet spent the past two years heading the U.N. agency for women after ending her 2006-10 presidency with a soaring popularity rating. Evelyn Matthei, a former labor minister, is running against her as the center-right coalition’s candidate.
Chile is known for its fast-growing economy and low unemployment. But the next president will need to grapple with growing social demands and protests demanding free education and a better distribution of Chile’s copper wealth.
Bachelet has promised major changes in taxes and education if she wins a second term.
The government also confronts a sometime violent conflict with Mapuche Indians over their demands for the return of ancestral lands.
A United Nations investigator urged Chile’s government last month to stop using a harsh anti-terrorism law against the Mapuche.
Bachelet said she regrets having used the dictatorship-era anti-terrorism law against Chile’s largest-indigenous group during her presidency.
Luis Andres Henao on Twitter: https://twitter.com/LuisAndresHenao