22 May AFTER APPROVAL OF MINING ROYALTY: NATIONAL EVALUATION AND PRODUCTIVITY COMMISSION TO MEASURE TIMELINES FOR MINING INVESTMENT PERMITS AND TRACK COMMITMENT TO REDUCE THEM BY 33%
Monday, May 22, 2023. Since Congress passed the Copper Mining Royalty Bill, The National Evaluation and Productivity Commission (NEPC) will embark on a new task.
The task involves a study that will not only identify the duration of permit processing for mining investment projects but also include a systematic measurement of the timelines involved in these projects in real-time and with future projections, enabling estimations of the timeframes required for specific milestones.
To accomplish this, the NEPC will soon define the terms of reference for the investigation and the method for obtaining data from all organizations involved in the approval of investment projects in the mining sector to conduct the respective measurement and estimation.
During the process of the Copper Mining Royalty Bill in the Senate, the Government and legislators signed an agreement protocol to address other issues related to the development of the sector and the regions of the country. Among other points, it establishes the reduction of timelines for the approval of mining projects. In this regard, it mentions that “the necessary measures will be adopted to reduce by one-third the processing time for permits related to mining investment projects, without compromising compliance with environmental regulations. To achieve this, a technical working group will be established within the next 60 days to identify the budgetary, administrative, and legal measures necessary to meet this objective. The National Evaluation and Productivity Commission will be entrusted with establishing the baseline and reporting progress towards achieving this goal.”
Specifically, the baseline refers to the study that the NEPC will conduct to determine and measure the time required to process the respective permits for obtaining authorization for a mining investment project. The NEPC’s measurement, based on a specific timeframe, will be continued in the future to identify any variations in timelines over time and to determine progress towards the committed goal of reducing the approval timelines for mining investment projects by 33.3%.
The NEPC has already conducted studies such as “Productivity in Copper Mining,” “Regulatory Review of SMEs,” and “Regulatory Quality in Chile,” which address the time delays in approving investment projects in mining and other sectors considered strategic due to their impact on the country’s economic growth.
One of the findings identified in the first study mentioned above is that the approval and disapproval process for large projects can be extremely lengthy, negatively affecting
The “Regulatory Review of SMEs” document determined that obtaining essential permits to start ventures in Chile poses a significant barrier, especially for smaller companies. Additionally, it indicates that an SME can take over a year and a half to start operating.
Furthermore, it highlights that the percentage of currently operating companies with municipal operating permits is directly related to their size. While only 13% of micro- enterprises have these permits, the figures reach 18% for small enterprises, 30% for medium-sized enterprises, and 90% for large enterprises.
In the “Regulatory Quality in Chile” study, there are 400 special permits identified, required for investments in mining, energy, real estate, infrastructure, and industry in Chile, and 53 institutions are responsible for granting them, with nine of them involved in all projects and sectors.
Finally, the NEPC confirmed that the two main problems for developing and processing investment projects in Chile are the low efficiency in granting permits and a declining perception of legal certainty.