Chile wants to buy Canadian liquefied natural gas to feed its energy-hungry mining industry as it bolsters its efforts to transform into a developed industrial nation and drag its citizens out of poverty.
Chilean President Sebastian Pinera, speaking to The Globe and Mail editorial board on Friday, said his government’s mission is to make Chile the first Latin American nation to become a truly developed country.
“[We want to] transform Chile from an underdeveloped country to a developed country before the end of this decade,” he said.
To help Chile reach its development goals, Mr. Pinera is looking to Canada as a potential source of liquefied natural gas (LNG) and has discussed with Prime Minister Stephen Harper the possibility of importing the fuel by ship.
“We will need to import a lot of energy, because we don’t have coal, we don’t have oil,” Mr. Pinera said. While Chile is rich in potential hydroelectric resources, he added, there is opposition to development from environmental groups – both inside and outside the country – and that will delay its hydro-power expansion.
Even if Chile develops its plentiful renewable power resources – solar, wave and geothermal – “we will still need natural gas,” Mr. Pinera said.
There are several pipeline projects planned to take natural gas to ports in British Columbia, and the Liberal provincial government has been enthusiastic about the prospects for the industry. By contrast, the B.C. government has rejected the Northern Gateway pipeline, which would carry heavy oil through the province.
If Canada can get LNG to ports in Vancouver, Chile would be a natural buyer, Mr. Pinera said, “because we share the same ocean.”
Chile is particularly short of power in its northern regions, where much of the mining sector is centred, and it also needs vast amounts of energy to use in the desalination of water, which is also in short supply in the north.
Mr. Pinera acknowledged that Chile has been sending mixed signals to mining companies around the world – including those based in Canada – because its courts have stopped some mining projects that had been approved by environmental regulators.
He said that has happened many times, but his government is trying to deal with it by creating new institutions, including an agency set up to analyze and approve projects and a specialized environmental court that will have the expertise to handle the cases.
A recent ruling against Canadian mining company Barrick Gold Corp., which forced it to stop development at its $8.5-billion Pascua-Lama gold-and-silver project on the Chilean-Argentine border, was a very different situation, Mr. Pinera said. Barrick did not comply with clear conditions that were set when it got approval for the mine, he said.
Reuters reported Friday that Barrick has already paid the fine associated with the breach and will present a plan to meet the regulator’s requirements next week.
Mr. Pinera, a billionaire who is nearing the end of his three-year term as President, has pledged to eliminate extreme poverty among Chile’s citizens before the end of this decade.
To do so, he said, his country has to make huge investments in education, science and technology, foster more entrepreneurship and innovation and beef up its infrastructure.
Chile is already growing dramatically, with its economy currently expanding almost 6 per cent a year. Canada’s GDP, by contrast, grew less than 2 per cent last year and is expected to show anemic growth of about 1.5 per cent this year.
Canada has a role in helping Chile’s transformation, Mr. Pinera said, because it is the third-largest foreign investor in Chilean business and because trade between the two countries has quadrupled since a free-trade agreement was signed in 1997. Chile needs technology, knowledge and innovation capacity from Canada, he said, and to that end Mr. Pinera signed agreements in Ottawa this week that will expand trade and encourage professional and educational exchanges between the two countries.