Chile economy, finance ministers quit

[SANTIAGO] Chile's finance and economy ministers resigned Thursday, plunging President Michelle Bachelet's government into crisis just three months before presidential elections which a conservative rival is tipped to win.

Rodrigo Valdes became the third finance minister to quit under Ms Bachelet, after falling out with her over pensions reforms and a controversial mining project.

Economy Minister Luis Felipe Cespedes and junior finance minister Alejandro Micco also announced their resignations.

The resignations come 10 days after a committee of cabinet ministers rejected the US$2.5 billion Dominga copper mining project, led by the private Chilean conglomerate Andes Iron, in the northern Coquimbo region.

The controversial project split Bachelet's left-center governing coalition.

Mr Valdes was replaced by chief of staff Nicolas Eyzaguirre, himself a former finance minister, while Mr Cespedes was replaced by Jorge Rodriguez, the head of the government bank BancoEstado.

Mr Valdes, a former International Monetary Fund economist, supported the project, located in an economically struggling region.

However, the project was also near a protected area where endangered Humboldt penguins breed.

Ms Bachelet publicly supported Environment Minister Marcelo Mena in opposing the project.

"Sustained movement towards higher growth levels requires discipline and government commitment, and room so the private sector can launch initiatives with clear and stable rules," Mr Valdes said upon resigning.

"I didn't manage to get everyone to share that belief," he told reporters.

Campaigning is already underway for the November presidential election, in which Ms Bachelet is not running for re-election.

The election front-runner is conservative Sebastian Pinera, who is seeking a second term in office. Pinera was president from 2010-2014, taking over just after Ms Bachelet's first 2006-2010 term.

AFP