Miners urge new Chile government to give exploration a boost

SANTIAGO, April 11 (Reuters) - Copper mining industry leaders meeting in Santiago this week called on Chile’s month-old government to open up exploration or risk losing investment as companies hunt elsewhere for new projects.

Chile produces around a third of the world’s copper, making it by far the biggest exporter of the base metal. But it faces declining productivity and rules that some say exclude newcomers.

At the CRU/CESCO World Copper Conference in Santiago, miners and industry leaders urged conservative Sebastian Pinera’s government, which took over from a center-left administration last month, to jump-start exploration.

Exploration has stagnated as large miners hold on to concessions that they are not exploiting, while a complex web of permits deter new entrants, they said.

“There is effectively little movement on mining concessions,” said Diego Hernandez, an industry veteran who heads trade body Sonami in Chile. “But ... there are ways that taxes and mining licenses could be utilized to generate activity.”

Though the country still attracts nearly 8 percent of global exploration dollars, many concessions remain dormant, he said.

Large miners that hang on to concessions they do not exploit do not face significant financial penalties, elbowing out juniors eager to develop them and creating a bottleneck, Juan Carlos Guajardo of consultancy Plusmining said.

“We’ve reached the point that the system is just not working for anyone,” he said.

Pinera, who oversaw a booming economy during his prior term as president between 2010 and 2014 - an era of peak copper prices - took office on March 11 with promises of luring investment into a sector central to Chile’s economy.

New Mining Minister Baldo Prokurica said Chile needs to do more, especially for smaller miners.

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