Diego Hernández, President of SONAMI:
“EXPOMIN is important for the industry because it shows the state of development of innovation and technology”
An optimistic Outlook of the mining sector for the short term is what the President of the Mining Association, Sociedad Nacional de Minería (Sonami), Diego Hernández since it is expected that as of this year those investment projects on hold will be reactivated.
This vision is based on the fact that, as a result of the better prices of commodities, a window of opportunities for investment that Chile must take advantage of is being generated. “In that sense, the new government must make it clear that investment is welcome in our country.”
Hernandez spoke with EXPOMIN Press and gave us his thoughts regarding the main mining exhibition in Latin America and the importance of this international tradeshow for the national industry.
- Why is it important for the industry to hold a tradeshow like EXPOMIN?
A: Mining tradeshows like EXPOMIN are very important for the industry, because they constitute a single point where the main suppliers of the industry and different mining companies can meet. Additionally, this exhibition provides the opportunity to learn of the many different developments such as the latest equipment and services offered, how technological innovation evolves and what innovative solutions have come to market that allow the industry to deal with problems in a better way.
At the same time, EXPOMIN makes it possible to strengthen networks not only at a national level, but also at an international level.
In this exhibition, we have companies participating from around the world and because of its size and relevance of the productive industry present in Chile, this tradeshow is a unique opportunity for all relevant mining stakeholders.
- Given a scenario of conservative optimism with better copper prices and an increased sector employment. What contributions can EXPOMIN make to national mining?
A: In general, mining has to address innovation in all its dimensions, not only technological innovation but also innovation in the way we are organized and carry about our work and our businesses.
The progress that the copper price has experienced gives us an opportunity to be able to get back on track and implement the emerging innovation without which mining with a long-term vision would go to no end.
We have to go about renewing ourselves and improving competition, adopting new work practices, all things part of what we know and that were clearly visible during the low prices period. Now, when companies have a few more resources, it is the time to be able to carry out these changes and include this innovation and EXPOMIN is the place to exchange these ideas and introduce different solutions.
- What is the contribution that the document “Fundamentos y Desafíos para el Desarrollo Minero” (in English, Rationale and Challenges for Mining Development), of the National Mining Society (SONAMI) that was released last June?
A: This document summarizes the analysis and ideas that as Sonami have developed, that include study centers and other stakeholders related to mining. We compile all the studies, all the ideas that were presented and we structure these such that there are proposal of concrete actions that would allow us to pick up on mining investments again.
Now, that apparently we are on the onset of a new investment cycle, that is yet to be more clearly defined, but with a clear change in trends, we believe that in the following years, important investments will be seen and the idea is that they are to be made in Chile.
In line with the above place, we have to take on certain actions like being proactive once again to attract investments. The projects we have on portfolio are competitive, but they aren´t extraordinary projects, so investors will not only look at the quality of the projects, but also the legal security, regulations, the conditions offered by the country will be very important and in this aspect we owe this effort since we could do much better this is why we need to react. And how we react, well in many way, like the idea of creating an agency for strategic projects to effectively have a single window; regulation to be simpler, more coherent.
Over the years, our regulation has become more complex with the emergence of new issues and it is time review this, so that, without questioning the objectives pursued by this legislation, make it more competitive, easier to comply with. For example, an environmental impact study that normally takes four years, make it now only take two years.
- You stated in an interview of a certain regulatory uncertainty, shorter environmental permitting and competition with other producing countries that keep the industry at a crossroads. What do you propose to overcome this scenario?
A: The first thing we have to do is make a public-private effort to improve regulation and legislation. As for regulation, there are many things that can be done without having to go to Congress, since it would be enough to make some changes in the scope of the Executive and for that we are available. We have released a series of ideas that make regulation easier to comply with, more practical.
In addition, there are some changes that require a law, which will take more time. However, this must be discussed with the authorities and the new conformation of the Congress that will be active as of March next year. We have clear things that complicate us, things that are not efficient, so we are available and we will try to establish these discussions.
Secondly, the State stopped taking a proactive measures to attract mining investment for some years now and that effort must be made once again.
Investment will not come on its own. The new government assuming in March must clearly show that investment are welcome and, in the same way, within the existing regulation, try to resolve the problems that exist with the projects that remain stuck and the way to carry this out.
Such that when we see that one or two large projects begins to operate next year, as Sonami, we believe that others will follow, those that are currently in the portfolio of projects not yet developed. We also believe that the copper industry will start investing once again, but we have to make the effort that other competing countries are making, and we have to attract investment to Chile.
- How do you see mining industry scenario for the remainder of the year and its projection into 2018, considering the recent higher copper price?
A: We have to start the year 2018 with a different approach, since with the improvement in prices we have seen that companies start to reactivate their projects.
We currently see that engineering companies have greater workload and demand on different projects, in conceptual and feasibility studies.
Also, many companies are processing environmental impact studies in order to be prepared for next year, when the new cycle of copper prices is here to stay.
However, there are still some doubts at the world economies level, of uncertainties that are gradually clearing so that when companies decide to invest we are prepared and can offer adequate conditions for those projects to be carried out in the country.