SIR:
Blame-seeking is part of our culture. Rather than holding an industry responsible for low growth, I would prefer that we ask ourselves what we are doing to recover our capacity to produce.
If we want to build a growth strategy, we must start by acknowledging the facts: our economy depends heavily on mining. To deny it would be to ignore the figures provided by the Central Bank.
Another concrete fact is compelling: the rest of the economy grew, but the mining contraction neutralized much of that progress, which had already fallen 17.4% year-on-year by August. That said, there are three quite distinct issues that need to be separated: the current drop in production, tax competitiveness, and fiscal and territorial contribution.
The royalty deserves economic evaluation. But turning it into the explanation for all our productivity problems would be to confuse the tax debate with the mining strategy we need.
As an industry, we were glad to hear from Cochilco that there is a portfolio of more than US$104 billion, although it is important to clarify that this does not mean that capital is being deployed. Nor does it even imply that more copper will be produced in the short term, because producing is not a matter of flipping a "switch" up or down. There are lead times and timelines involved in engineering, permits, construction, and start-up.
The declining ore grade forces us to process more ore to obtain the same amount of copper, all…
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Copper smelting. Comments
DEAR DIRECTOR:
It is part of our culture to look for culprits. Rather than blaming an industry for low growth, I would like us to ask ourselves what we are doing to recover our capacity to produce. If we want to build a growth strategy, we must start by recognizing the facts: our economy depends heavily on mining. Denying this would mean ignoring the figures provided by the Central Bank. Another concrete fact is compelling: the rest of the economy grew, but the mining contraction neutralized much of that progress, which had already fallen 17.4% year-on-year in August.
That said, there are 3 very distinct issues that need to be separated: the current drop in production, tax competitiveness, and fiscal and territorial contribution.
The royalty deserves economic evaluation. But turning it into the explanation for all our productivity problems would be confusing the tax discussion with the mining strategy we need. As an industry, we are glad to hear from Cochilco that there is a portfolio of more than US$104 billion, although it is important to clarify that this does not mean that capital is being deployed. It does not even imply that more copper will be produced in the short term, because producing is not a matter of flipping a "switch" up or down. There are lead times and timelines involved in engineering, permits, construction, and start-up. The lower ore grade forces us to process more ore to obtain the same amount of copper; hence the importance of technology, maintenance, equipment availability, metallurgical recovery, energy, and water.
And this is precisely the point of my letter. I would like to hear a growth strategy that speaks of a public-private agenda addressing productivity in each of those activities. The great effort to unblock projects that were eternally stuck in some government agency is valued, as are the goals of reducing permitting times. What we still lack is that strategy, with all the actors, that also establishes goals for operational productivity, project execution, technology adoption, and supplier development.
Dominique Viera P.
VPO Metaproject Group
Director, Alianza Minera de América Latina
Director, Aprimin
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Mining
Economy
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productivity