Mining Closure Act would include accounting changes to benefit medium miners
The draft prepared by the government is aimed to find the flaws in Law 20,551, thus lowering the required supplies today
A few weeks ago, the minister Cristian Larroulet anticipated that Law 20,551, of Mine Closure, was within the government’s plans to be amended principally by “legal uncertainty has become complex for PYMES”. The inaccuracy referred to is on the method used to determine the guarantees for closure, which now regularly is calculated by estimating the present value of the costs of implementing this process of mine closure, which implies, mining companies say, a high cost.
Something said by Alberto Salas, Sonami’s President: “It is essential to change. Do not correct this will result in projects which, given the dynamics of the mine planning will have to be modified countless times with the loss of effort and material and human resources, both from the state system, as the producers themselves. “
But Benedict Vasquez says, KPMG Chile Mining Managing Partner, this method is neither expensive nor cheap, but simply is what it is, in the context of modern accounting.
“If you look from the point of view of a mining investment more than expensive, this is that if a company had to disarm a hill, then have to replace it. This is not expensive, it is a cost you have to do, and that is true in all developed countries. There is a feeling that it is expensive because before, five years ago, this cost did not exist, but it’s something to do, “says Vasquez.
But in the government they are doing a survey that seeks to list all the complications of law focusing on those that affect medium companies.
In that survey is focused today the Ministry of Mining (directly, through its services and associations with) and although Minister Larroulet anticipated that these changes could occur before the end of this month, along with other reforms under of a pro-investment and competitiveness project, it is likely that this delayed until October or November, “and in no case could be approved by the current government,” says a senior executive.
This delay is the most complicated to the miners, who see how this law is in addition to other factors, says Patricio Céspedes, president of the Mining Association of Antofagasta, makes more complicated the picture to them.
Juan Carlos Saez, Corminco’s President, explains that for mining this law is just one more obstacle to mining development, “Today the function of mining is not only exploitation, so is the social and environmental licenses, and all that must be paid, and cannot always be. With copper at four dollars itself could be two years ago, now who is going to invest in a mine that costs 10% or 15% more than two years ago and who knows how much produce less? “.
An example of this is, for example, the closure of El Indio, from Barrick, a reservoir of medium size and whose closing process has so far cost around U.S. $ 80 million, a price which, say miners, complicates them.
But from the Government, authorities agree that all demands cost what they cost, and the cost has to be paid to operate, because the focus is on advancing to the development and not to the cheap development of the activity.
“What is sought is to allow greater ease, but we have to pay for the costs of having a world class mining,” says an authority.
Source: El Mercurio
