One of the goals of the Chilean Government's National Lithium Strategy is to increase tax revenue, which can be accomplished through levying an ad valorem tax or via government ownership of projects. A key consideration when designing the tax system is the Laffer curve, which demonstrates that although higher taxes lead to more revenue, the tax burden can reduce the number of projects undertaken.We computed the ideal revenue for Chilean salt flats based on cost estimates for both operating and capital expenses, utilizing data from various salt flats worldwide. Our analysis indicates that if it is not possible to discriminate by project, the optimal ad valorem tax rate and government participation rate are 10.94 % and 15.97 %, respectively, generating about US$ 3600 million per year in revenue for the government. If a separate rate is applied for each project, the total amount increases to US$ 4355 million, irrespective of the mechanism type. If both mechanisms are implemented simultaneously, the collection does not increase in relation to the amount already obtained.This research demonstrates that if the Chilean government persists in demanding a majority stake in the partnerships engaged in the exploitation of lithium, it is probable that few agreements will come to fruition in the following years. A successful strategy should balance revenue optimization with environmental sustainability and community engagement, factors already incorporated into Chile's regulatory framework. Consequently, this approach would help Chile maintain its position in global lithium production despite competition from other countries with significant reserves.

The objective of this work is to estimate the carbon footprint and water footprint inventory using primary information of the lithium carbonate and lithium hydroxide production of SQM and Albemarle in the Atacama Salt Flat, which represented 30% of global lithium production in 2020. A contribution of the work is demonstrating that these two operations have the lowest reported GHG global emissions per unit production of lithium carbonate and of lithium hydroxide, and that this is possible due to natural and anthropogenic characteristics. Another contribution is that the natural advantages of the Atacama deposit should remain crucial in this leadership in spite of the introduction of an assortment of technologies in the reduction of GHG emissions in the future. A third contribution is showing that the largest cause of the carbon footprint for lithium carbonate production at the Atacama salt flat was soda ash, with 63.1% of the total.

The energy transition relies heavily on minerals such as copper and lithium. In today's modern world, where consumers are increasingly aware of the need to protect tomorrow's natural resources, mining is expected to be not only economical but also socially and environmentally sustainable. In light of this, mining production must be competitive in these three dimensions of sustainability to meet demand, understanding that consumers will prefer a more sustainable material. This study aims to comprehend the competitiveness of copper and lithium Chilean production from a sustainable perspective using a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) developed by a panel of experts.Based on an analysis of 165 factors driving mining's sustainability, the copper industry in Chile ranks third in the sustainability ranking for the world, while lithium ranks second. The foregoing implies that Chile, the world's leading producer of copper and second global producer of lithium, still has room to improve sustainability by introducing the following measures: (1) improving effective communication among stakeholders; (2) dissemi-nating sustainability knowledge; (3) developing State mining policies; (4) restoring stability in the country; (5) developing a sustainable quality brand of Chilean commodities; and (6) capitalizing on valuable human capital.

Research Question/Issue We assess how ownership concentration influences the sensitivities of expansion investments and maintenance investments to changes in a firm's cash flow. We find the causal effect by exploiting the exogenous variation in the price of a firm's product. We also evaluate whether state versus private ownership affects the impact of ownership concentration on investment-cash flow sensitivities. Research Findings/Insights Using detailed data from 134 major copper mines operating in 29 countries over a 17-year period, we show that a more concentrated ownership increases the sensitivity of expansion investments to changes in a firm's cash flow, while we do not detect a significant effect for maintenance investments. We also find that state ownership negatively moderates the effects of ownership concentration on the expansion investment-cash flow sensitivity. Theoretical/Academic Implications The findings improve our understanding of ownership structures and show the nuances of these structures when different ownership features are combined in the assessment of investment sensitivities. Practitioner/Policy Implications The asymmetric effects of ownership structures on different investment sensitivities call for a more fine-grained analysis of incentives, benchmarking, and information disclosure policies. This issue is especially relevant in state-owned enterprises (SOEs) and in firms with a low ownership concentration.

Knowing the factors that influence the secondary refined copper supply behavior has been fundamental in generating a copper market model and developing public and corporate policies. When analyzing the explanatory variables used in the existing models in the literature, it is possible to observe high variability in estimating the parameters when modifying the availability of information or changing the observation period. Based on this, we argue that only some explanatory variables will have robust estimated parameters, which means that they are unbiased, stable (i.e., they do not vary significantly when the specification of the equation or the number of observations changes), and with asymptotic convergence over time. This work defines and validates a method to select robust explanatory variables capable of quantifying the refined secondary supply of copper (or any other variable) in a given period. Using a database with 23 explanatory variables in the period 1960–2017, we characterize the estimated parameters with high and low robustness, thus supporting the proposed hypothesis. The results obtained allowed identifying those variables with low uncertainty in estimating their parameters, with a high statistical significance, and with a low standard deviation. This allows to obtain a robust function for the secondary refined copper supply in the long term, capturing essential elements of reality.

Copper is essential in attaining a sustainable development path due to its prominent role in the electromobility and renewable energy industries. In 2019 refined copper usage was 23.5 million tons, of which primary copper supplied 86.3%, and the remaining 13.7% was provided by secondary metal. In the future, copper recycling would increase significantly concerning primary copper supply to meet the goal of decreasing greenhouse gases emissions. Secondary copper production reduces energy consumption by 85% and greenhouse gas emissions by 65% compared to average primary sources. This study analyzes seven econometric models described in the literature that tried to explain the supply of secondary refined copper worldwide (SRC). Furthermore, this study assesses the forecasting capacity of these models in the short and long-term. Although the explanatory variables selected by previous researchers are theoretically supported, they failed to fully explain SRC. An empirical analysis for the period 1960-2017 confirmed that only two of the eight studied explanatory variables shown to be causal of SRC in the short-term. The re-estimation of the coefficients shows high instability when the number of variables or observations changed, making it difficult to analyze the future market and to assess public policies. Although the explanatory variables share the same long-term trend (cointegrated series), they do not properly forecast the future when evaluated using the Backcasting methodology. Based on these results, it is possible to improve the explanatory and predictive power of the analyzed models and reduce their average error.

Several studies dealt in the past decades with future predictions of the copper demand, motivated mainly by potential copper shortages that could arise due to insufficient reserves. It is known that there was never a shortage of reserves in order to satisfy demand in the last century and up to the present time. This paper addresses two questions. Did these concerns arise due to excessive demand forecasts, or due to stagnating reserves assumption, or due to both aspects? The article evaluates some of these predictions of future copper demand and compares forecasts with the real metal demand that materialized in past years. Also, it analyses the reserve assumptions of several studies and compares them with what really happened with copper reserves. In the case of recent forecast models that span into future years, whose copper demand is not known yet, a backcasting method was used in order to estimate forecasts, which consists of applying the model in the past. Five out of the seven models rerun in the original periods overestimated demand and two out of them considered that reserves were a fixed stock. Also, the two models studied by the backcasting method considered that reserves were a fixed stock. The four models that considered reserves as a fixed stock run out of reserves, irrespective of whether they overestimated or underestimated demand. These results suggest that predictions of a future scarcity of copper could be mainly attributed to the assumption of a fixed stock of reserves and not necessarily to overestimations of demand. The remaining five models did not consider the future availability of copper.

Mining jurisdictions avid to attract international investments to find and exploit their mineral deposits contend for international capitals. This led to policymakers, analysts, and companies to think about the factors affecting the competitiveness of mining districts. The traditional paradigm states that the capacity of a country or jurisdiction to attract investments and develop its local industry is a function exclusively of the quantity and quality of the ore deposits within its territory. On the other hand, the alternative view suggests that the previous conception is incomplete, because companies not only look for a good geologic potential but also for a favorable investment climate (Tilton 1992). Through cross-country econometric models covering the years 1996 to 2014, this work supports the alternative paradigm of mining competitiveness and tries to contribute to a better understanding of the relationship between the geological potential and the investment climate when determining the attraction of mining investments. The study concludes that, in order to develop a local mining industry, a country should have a wealthy natural endowment, but also it must offer a good investment climate. In addition, it shows that both variables are related through a multiplicative effect, but once public policies and other contextual variables reach certain reasonable levels (the “investment climate threshold”), jurisdictions compete almost exclusively based on its natural endowment. These results have significant implications for the implementation of public policies, especially in periods when mining contribution to social welfare is under scrutiny.

In the long term, primary and secondary supply of refined copper satisfies demand. Numerous models exist to explain and predict demand and secondary supply; however, the projection of primary supply relies mostly on detailed knowledge of potential mining projects and on existing ore reserves and resources. Much discussion has occurred historically regarding the availability of resources and reserves for the future. Chile, being the largest copper producer, also has the largest reserves in the world; therefore, it retains its potential to be a key player in future supply. This article explores some of the most relevant resource and technological challenges that may emerge with an accelerated development of brownfield and greenfield copper mining projects in Chile through 2035, without considering economic, regulatory, and environmental constraints. A “Full Scenario” was created to accommodate these conditions and restrictions. It includes estimates of future ore reserves, copper production, plant capacity, ore grades, energy and water consumption, greenhouse gas (GHG) emissions, and generation of tailings. Maximum production would exceed 10 million tons of contained copper from 2027 to 2030, with a resulting decrease of ore grades and the growth of energy and water consumption. The growth of indirect GHG emissions through 2035 is estimated at 18.4% less than copper production growth, because all new electric energy for this scenario would be based on renewable energy. Also, all new water used by 38 out of the 42 mining projects considered would be seawater, and some of the continental water used in 2019 would cease to be used in mining.

We evaluate how the change in the value captured by the focal firm, as a result of an exogenous shock in the price of its product, affects a firm’s total capital expenditure and its allocation to sustaining and expansion investments. Different behaviors in investment decisions (and the allocation of investments in sustaining and expansion activities) can affect firm heterogeneity, competition, and the value distributed to stakeholders. Using data from the main copper mines in the world, we show that the sensitivity of total investments to exogenous changes in the price of minerals is higher in privately-owned firms. Even more important, we found that the difference in investment behavior is driven by a lower sensitivity of investments in expansion activities in the case of state-owned companies. In contrast, investments in sustaining activities are not significantly different across ownership types.

A widespread and pessimistic view of the availability of mineral commodities calls for strong government initiatives to ensure adequate future supplies. This article provides a more market oriented and optimistic perspective, one that focuses on production costs and prices rather than physical availability. It sees short-run shortages continuing to plague commodity markets in the future as in the past. Though painful while they last, these shortages are temporary and do not pose a serious long-run threat to human welfare. Moreover, even without government intervention, they self-correct. The sharply higher prices that they evoke create strong incentives that foster supply and curb demand. Potentially more serious are long-run shortages due to mineral depletion. Such shortages are often thought to be inevitable, a conclusion that flows directly from the physical view of depletion. For various reasons, we reject this view of depletion in favor of an economic view. The latter recognizes that depletion may create long-run shortages, but stresses that this need not be the case if new technology can continue to offset the cost-increasing effects of depletion in the future as it has in the past. The economic view also suggests that a list of mineral commodities most threatened by depletion can best be compiled using cumulative availability curves rather than the more common practice of calculating commodity life expectancies based on estimates of available stocks.

Chile has a rich, but poorly known history of placer gold mining. At present, this sector is almost nonexistent and there are some restrictions for its revival: disperse and partial information on existing resources and limited technical expertise to assess the potential of placer gold mine sites. This paper presents the background, methodology and results of the prioritization process of known prospects of this kind in Chile. This research was part of a publicly funded project aimed to incentivize the development of this industry. The ranking was carried out using the analytic hierarchy process, which allowed to include different quantitative and qualitative variables related to the economic potential, technical aspects, contextual viability and socioeconomic factors in the analysis. The results show that, despite the increasing relevance of environmental and community issues in mining development, the business potential and the economic/technical aspects are the main factors in the early selection of a site to advance in exploration and development activities. Both variables represented around 40% and 37% of weights in the final selection, respectively. In contrast, contextual viability and local socioeconomic impacts only accounted for the remaining 23%. This study also shows that the inclusion of experts with different backgrounds in the process enriches the analysis and does not significantly distort the final outcome of the prioritization. Finally, the relevance of using MCDM tools when assessing the attractiveness of mine sites for their development is highlighted, particularly when public funds for subsequent exploration activities are committed.

This article presents the first attempt to evaluate the direct economic return of the provision of public geoscience information in Chile. To achieve this goal the study uses multiplier effect ratios through the value chain of PGI and a probabilistic discounted cash flow model to evaluate the economic returns of different scenarios for the ongoing governmental program mandated to generate country-scale geological information, named the National Geological Program. The study shows that, in average, every dollar invested in PGI in Chile during the past three decades could have generated 11.5 dollars of government tax revenues from the mining industry (in terms of its NPV), with an IRR of around 21%. These results are in accordance with comparable studies abroad, but they should be taken carefully due to methodological restrictions of the study. These indicators are positive in almost all the scenarios considered in the study, despite that they show a wide range of results. Similar outcomes are obtained for the National Geological Program when different scenarios are evaluated.

The nationalization process of mining companies was a global issue from the beginning of the twentieth century. It first occurred in Europe for diverse reasons and at the end of the 1940s, it reached developing countries. The cause for nationalization in the latter was dominated by the search to recover a national patrimony and to regain sovereignty in countries where mining weighed too much economically compared to other activities. Transnational corporations generated so much of exports, taxes, and GDP in these countries that governments had very little room for devising national policies. The future of countries was decided in the secret of foreign board rooms of these companies, without consultation to national governments. Nationalization was also driven by the belief that by managing mining resources, the countries would accelerate economic development. Peru and Chile, indisputable leaders in mine production, experienced nationalization at the end of the 1960s and beginning of the 1970s, but the outcome was very different in each country. This paper explores the successes and failures of mining nationalization in Peru and Chile, and how the outcomes influenced mining policy during the following decades.

Abundant evidence suggests that the massive global exploitation of copper mines over the last two decades led to mine aging expressed as ore grade reduction, deepening of open pits and underground operations, hardening of the rock, and increasing stripping ratios. These processes have affected the evolution and change of key environmental footprint indicators. Copper ore grade decline seems the most important of these factors and depends on variables including the rate of extraction, ore deposit geological features, introduction of new technologies, the copper price and its co-products, and the discovery and exploitation of new ore deposits. From 2001 to 2015 Chile increased its copper production by 22% and produced overall 80 million tons of copper, more than it produced in the entire 20th century. This paper explores the effects of mine aging on three key environmental footprint indicators: energy and water consumption, and greenhouse gas emissions. Electric energy consumption per ton of copper should grow in the coming decade at a significantly slower rate than in the last fifteen years because of the slowdown of the ore grade decline in mill concentrators. Additionally, a steeper decrease is expected for the emission of greenhouse gases per ton of copper.

Copper is a metal commonly used to transport water systems due to its stability and advantageous properties. At the same time, corrosion may be a problem affecting these systems, for instance, causing the leaching of metal (Cu (II)) in water. In this study we have applied an electrochemical method for extracting this element. The use of humic acid and of a conductive polymer (polypyrrole) in a PIGE/HA/PPy modified electrode was evaluated for the electrochemical extraction of Cu(II) from drinking water. Synthetic water samples were contacted with Cu(0) pipes during 24 h (leaching yielded Cu(II)). Modified electrodes were prepared by mechanical transfer of humic acid (HA) to the base electrode (PIGE) and then depositing a polypyrrole (PPy) coating by potentiostatic electropolymerization. The modified electrode was subsequently utilized for Cu(II) electrochemical extraction from water samples using a chronocoulometric method, with a removal rate of up to 72%. Thus, the feasibility of decreasing Cu(II) concentration in drinking water systems was proven, corroborating the usefulness of the PIGE/HA/PPy surface modified electrode. Besides, the application in systems of this kind can be further improved by considering the different variables involved, e. g. PIGE electrode area, HA amount, PPy thickness, etc.

Modelling and prediction of the copper concentration released from copper plumbing tubes due to corrosion, dissolution, precipitation and other processes has not previously been successful. The model presented here is based on a set of dissolution and precipitation reactions, equilibrium between species in solution and solids, mass balance, kinetic expressions, adsorption isotherms, and surface area coverage by precipitates.The model developed has created two major outputs: first; it is the most conclusive collection of mechanistic considerations to date; and second; reasonable correlations between the model and actual data have been obtained for a broad range of waters. (c) 2012 Elsevier Ltd. All rights reserved.