Chile's Bachelet eyes changes to land, water use rules

By Alexandra Ulmer SANTIAGO (Reuters) - Chilean Presidential frontrunner Michelle Bachelet said on Friday she is mulling reforms of land and water-use rules, in the latest hint of what may be in store for the copper powerhouse's crucial mining and energy sectors. Land-use plans need to be reformed to clarify where energy projects can be built and the country's dictatorship-era rules on water usage need to be reviewed, Bachelet said. The center-left candidate, poised to cruise to victory in next month's general election or a likely December runoff, has not yet provided the fine print of her keenly-awaited plans. But she put the spotlight on the need for a solid regulatory framework during a radio debate with eight other candidates vying for the presidency. "We have to guarantee that environmental institutionality carries out what it's meant to do," Bachelet said. "I've put forward a land-use plan, so that we define exactly where energy projects can be built, in collaboration with citizens," said Bachelet, who was the country's first female president from 2006-10. A land-use overhaul would likely be cheered by big industry, which supports clearer rules. A nebulous regulatory framework has allowed environmental and social groups to take to court even energy projects that are already approved, putting in limbo billions of dollars of investment. Massive coal-fired plants and hydropower investments in pristine Patagonia are particularly unpopular. While the economy of the world's No. 1 copper producer has roared on the back of a mining boom, Chile is now wrestling with how to distribute the spoils of the bonanza and protect its environment. Bachelet also said she wants to review the Andean country's water rules, which are widely seen as favorable to the mining industry. Mining, which accounts for roughly 15 percent of the country's gross domestic product (GDP), have "the right to use any water found during their work," according to Chile's Water Code, which dates from Augusto Pinochet's 1973-90 military dictatorship. Environmentalists say this is a form of privatizing water. The use of water is of rising concern after a series of droughts, exacerbated by the fact that much mining takes place in Chile's mineral-rich Atacama desert. "We have to do an important review of the water code," Bachelet said. "The state has to first of all guarantee water for human use and without doubt also for production, especially for small-scale farmers," she added. MINERS AWAITING DETAILS Power-intensive miners are craving the specifics of Bachelet's energy and mining plans, but details have so far been scant. She is poised to unveil more extensive policy proposals on Sunday. An estimated 8,000 megawatts needs to be added to Chile's 17,000 MW of power production capacity by the end of the decade, the government says. Several coal-fired plants were approved under the moderate Bachelet's government, drawing the ire of environmentalists and hurting her popularity with youth and green groups. "Coal-fired thermoelectrics were clearly an obligation during the emergency when gas was ending," Bachelet said, referring to a 2004 gas crisis with Argentina. Bachelet, who appears to have swerved further left since leaving the La Moneda presidential palace, said she was betting on gas, small-scale hydropower, and renewable energies to combat steep power prices. "We have to move toward gas-fired thermoelectrics, there are smaller-scale hydropower projects, we also have non-conventional renewable energies," she said. Bachelet is expected to make liquefied natural gas the backbone of her energy policy over the next four years, hoping to tap into a global shale boom by expanding terminals and ports. (Reporting by Alexandra Ulmer; editing by Bernadette Baum, G Crosse)