Zambian Chamber of Mines (ZCM) believes the country’s mining sector can learn from Chile, the world’s biggest copper producer.
The chamber said Chile and Zambia produced roughly the same amount of copper in 1970, which was about 680 000 t/y.
However, currently, Chile produces 5.6-million tons of copper – about 30% of global copper output – and is home to seven of the ten largest copper mines worldwide.
ZCM notes that Chile has created a solid legal framework for foreign investors that guarantees sanctity of contract, protects their assets from expropriation and allows them to lock in agreed mining tax rates for up to 20 years.
Chilean copper production more than doubled during that decade, even though copper prices remained muted.
“We see the world as a source of opportunity, rather than a threat, and, 30 years ago, we were the first country in Latin America to have this vision.”
“In Chile, a change of government does not produce a change in the rules. This creates stability and gives certainty to investors,” said Chilean Copper Commission executive VP Sergio Hernandez.
The ZCM commended that Chile places great emphasis on due process and the rule of law, when it comes to the mining industry, even where it might not be to the country’s short-term benefit.
The Chamber also applauds Chile’s issue of mining concessions, which in many countries are subject to strict ‘use-it-or-lose it’ conditions.
“In Chile, a mining concession is indefinite once a company has paid for and secured a mining right; it is theirs to exploit at any time. It is a judicial concession, not an administrative concession. This has been an important part of our success,” Hernandez said.
“We grow the cake using two strategic principles – the first being that we are open to the world in terms of trade and taxation agreements and [the second that] we encourage small, local companies to export and to become big companies,” Hernandez states.
The United Nations Conference on Trade and Development’s 2017 ‘World Investment’ report lists Chile as the world’s seventieth-largest recipient of foreign direct investment (FDI) between 2013 and 2015 and notes that the yearly FDI flows in this period stood at $20.3-billion, $21-billion and $20-billion respectively.