Il Nuovo Postiglione - Chile sinks controversial mining project over environmental concerns

Environmentalists had criticized the proposed open-pit mine and port project in the north of Chile close to the National Humboldt Penguin Reserve due to its potential ecological impact on a unique area known for its natural diversity.

The $2.5 billion project was unanimously rejected by left-wing President Gabriel Boric's cabinet.

"We are confident that a robust, traceable, evidence-based (decision) has been adopted here," said Maisa Rojas, the environment minister.

The project aimed at extracting millions of tons of iron ore and thousands of tons of copper in an impoverished area of northern Chile around 450 kilometers (280 miles) from Santiago, the capital.

But the area comprises a nature reserve encompassing three islands that are home to 80 percent of the world's Humboldt penguins, which are an endangered species, as well as whales, sea lions and the world's smallest otter species.

Chilean company Andes Iron wanted to also build a treatment and deposits plant, a water desalination plant and a port for loading minerals.

"The port is in a place that has an absolutely unique ecological value," said Rojas.

When taking office in March 2022, Boric's government had expressed its rejection of the port's construction.

Andes Iron's Dominga mine project has had a controversial history in Chile.

It first underwent an environmental impact evaluation a decade ago before it was rejected in 2017 by the socialist government of then-president Michelle Bachelet.

But under her conservative successor Sebastian Pinera, the supreme court ordered a new evaluation.

The controversy then turned into a scandal in 2021 when leaked documents known as the Pandora Papers implicated Pinera -- then serving his second nonconsecutive term as president -- in a seemingly shady deal surrounding the Dominga project.

Dominga was sold through a company owned by Pinera's children to a businessman close friend of his for $152 million.

The leaked papers said a large part of the operation was carried out in the British Virgin Islands, a tax haven.

Despite the embarrassing revelations, the Senate voted against impeaching Pinera -- it failed to reach the two-thirds majority needed to do so -- thus sparing him a potential jail sentence of up to five years.

S.Abato--INP