Los Andes leak nixes CEO’s cabinet post in Chile

The former CEO of Los Andes Copper (TSXV: LA; US-OTC: LSANF) won’t become Chile’s new Minister of Mines following a communications mix-up.

CEO Santiago Montt said Tuesday he had submitted his resignation to take up the post in President-elect Jose Antonio Kast’s government due in March after the move was first reported by local media. But Kast hadn’t publicly confirmed it.

The apparent appointment drew criticism from opponents who noted it looked like business interests would be calling the shots in the new government.

“Government announcements should be made by the democratically elected authorities, not companies with direct economic interests in the sector,” deputy Diego Ibáñez, from President Gabriel Boric’s Frente Amplio party, said in a tweet.

When conservative lawyer Kast unveiled the members of the new cabinet in a ceremony Tuesday night, Montt was nowhere to be seen.

‘Awkward’

Instead, property developer Daniel Mas will hold the post of both Economy Minister and Mining Minister.

“Los Andes’ announcement was awkward for Kast’s team as it opened up the new cabinet for criticism and probably led to the reversal of the decision,” Hernan Campos, a political scientist at the Diego Portales University, told The Northern Miner.

Los Andes shares fell almost 8% by mid-Wednesday to $15.74 apiece in Toronto for a market capitalization of $465 million (US$336 million). The stock has traded in a 12-month range of $5.05 to $17.50.

After winning a landslide presidential vote last December, Kast will take office on March 11, ending four years under left-leaning Boric.

Los Andes said Montt would remain with the company until Feb. 19 to ensure an orderly transition while the board searches for a replacement. Chief geologist Antony Amberg is to serve as interim CEO in the meantime.

The explorer is advancing the Vizcachitas project, one of Chile’s largest greenfield copper sites not owned by a major company. A prefeasibility study released in February 2023 outlined average annual production of about 183,000 tonnes of copper for the first eight years of a 26-year open pit operation. It forecast initial capital spending at US$2.4 billion.

New priorities

Mas should be busy in his new role since Kast has made economic growth – together with law and order and public finances – a priority for his four-year administration.

Helped by record copper and gold prices, resurging lithium demand and a more encouraging political environment, investment in Chile’s mining industry could soar to over $100 billion over the next decade, according to a recent government report.

BHP (NYSE, LSE, ASX: BHP) and Freeport McMoran (NYSE: FCX) are preparing major expansions in copper while a new strategy of public-private alliances promises to unlock Chile’s huge lithium potential.

The new administration will also have to find a solution for state copper company Codelco which is struggling under massive debt to reverse a slump in production.