(Bloomberg) -- Chilean officials rejected a mining and port project in the latest twist in more than a decade of legal and regulatory deliberation over a $3 billion investment that’s pitted environmental protection against economic growth.
In a case that’s also laid bare the involvement of politics in Chile’s permitting procedures, members of a ministerial committee voted unanimously against the Dominga iron ore and copper project in a session held Wednesday.
The committee was comprised of undersecretaries after an environmental court annulled a 2023 determination by ministers to reject the project, citing a lack of impartiality by two members. Local environmental regulators approved the project in 2021 before the Supreme Court opted to leave the decision in the hands of ministers.
Authorities’ handling of Dominga has become a cautionary tale in a country that otherwise boasts strong institutions and clear rules. In 2017, Finance Minister Rodrigo Valdes was among senior officials to resign after a cabinet split over a decision to block the project based on its location near habitats for whales, dolphins and Humboldt penguins.
The controversial project, in which former President Sebastian Pinera once held an indirect stake, is controlled by Chile’s Delano Mendez family. It featured in the Pandora Papers investigation into the secret offshore accounts of heads of state and business leaders.
Dominga’s operating company, Andes Iron, is seeking strategic partners for a project that includes a mine with daily mineral capacity of 95,000 metric tons, a desalination plant and port terminal. It would employ 1,450 people when up and running in 2030.
In a statement late Wednesday, Andes Iron vowed to take legal action to overturn the government’s decision, which the company said is unconstitutional and sets a “nefarious precedent.”
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