Chile likely to nationalise mining?

Chile has taken a tiny, but symbolic step towards nationalising some of the biggest copper and lithium mines in the world – a move, that if it ever happened, would damage the likes of BHP and Rio Tinto, directly, while boosting them and other Australian companies mining both metals, and Australia as a whole.

The nationalisation proposal was approved on Tuesday by a committee as part of the drafting of a new constitution in Chile.

The 13-to-6 vote by members of an environmental committee is the first of several hurdles that the controversial proposal would need to clear before becoming a proposal capable of being voted on. It would require support from two thirds of the full assembly to become part of the draft charter that will be put to a referendum later this year.

The environmental commission of the assembly, which is drafting Chile’s new constitution, approved the proposal “for the Nationalization and New Social and Environmental Management of Copper Mining, Lithium and other Strategic Assets.”

Chile is rewriting its Constitution to replace a market-centric one that dates back to the military dictatorship of General Augusto Pinochet.

Last week, the same committee gave a first up approval for a proposal to annul operations that infringe on indigenous land. Other proposals include setting time limits on concessions, with the industry pushing hard to retain the indefinite model, arguing it is critical for long-term planning that underpins investments.