A proposed article in Chile's new constitution, currently written by a coalition elected by popular vote, is viewed with caution by some analysts and investors because it requires the state to obtain the consent of indigenous groups before approving any projects that could affect their rights.
The provision was passed by 107 votes to 43 on 18 February, above the two-thirds majority required, and still needs to be approved by the "coordination" committee, which is charged with ensuring that the final text contains no conflicting clauses.
Artikeln stötte inte bara på tekniska svårigheter vid upprättandet av en lista över inhemska territorier, utan kunde också fastställa tidsgränser för redan beviljade koncessioner.
BTG analyst Cesar Perez-Novoa said the article's lack of detail could lead to a legal "quagmire." He noted that it did not indicate any timetable for consultations, which indigenous bodies would decide, what majority was required or what role the State would play. Granting so much power when the rules for negotiation are already in place could seriously discourage investment.
Although Chile's constitution has been amended over the decades, its previous version was widely unpopular and seen as a source of social inequality.
Historically, mining has been one of the country's most important economic sectors, with copper accounting for the largest share of the sector's contribution to gross domestic product. The country also has the world's largest known reserves of lithium.
Researchers at FTI Consulting warn that any major changes affecting the industry could significantly affect mineral supplies, which are crucial to the world's industrialisation and energy transition.
Politicians in the world's largest copper producer are also fine-tuning a new mining royalty bill that would raise tariffs on companies based on gross sales and profitability.
"We estimate that if the new tax is approved, Chilean copper mining companies could see their tax rate rise to 80 percent and profit margins fall by more than 50 percent at current copper prices," FTI said in its latest report.
Analytiker tror att Chile kan bli det land med den högsta skatten på kopparbrytning, vilket tvingar företag att om-undersöka lönsamheten för sina nuvarande och framtida investeringar.
LON: ANTO, which focuses on Chile, has been very vocal about the potential negative impact of higher royalties on Chile's economy, saying on Tuesday that the new royalties would not be as bad as expected.
It noted that the Senate had already released a plan that was "less onerous than the original proposal put forward by the House." It also said "further legislative steps" are needed before a final bill can be approved.
Det kommer också den nya konstitutionen, som chilenare kommer att besluta om att ratificera senare i år.
