Chilean officials have unanimously rejected the $3bn (3trn pesos) Dominga iron ore and copper project, a significant development in the ongoing debate over environmental protection versus economic growth.

This project has faced more than a decade of legal and regulatory scrutiny, culminating in the ministerial committee's decision on Wednesday, according to a report by Bloomberg.

The committee, comprised of undersecretaries, voted against the project following an environmental court's annulment of a 2023 determination by ministers to reject it.

The court cited a lack of impartiality from two committee members, leading to renewed deliberations on the project’s fate.

Local environmental regulators initially approved the Dominga project in 2021, with the Supreme Court later deciding to leave the final decision to the ministers.

The Dominga project, controlled by Chile’s Delano Mendez family, aims to achieve a daily mineral capacity of 95,000mt.

It also includes plans for a desalination plant and port terminal, with the potential to employ 1,450 people once operational in 2030.

However, its location near habitats for whales, dolphins and Humboldt penguins has raised significant environmental concerns.

The handling of the Dominga project has drawn attention to politics and regulatory processes in Chile, a country known for its strong institutions and clear rules.

Notably, former President Sebastian Pinera once held an indirect stake in the project, adding a layer of political complexity to its approval process.

In 2017, the project faced significant opposition, leading to the resignation of Finance Minister Rodrigo Valdes and other senior officials after a cabinet split over a decision to block it.

The project has also been linked to the Pandora Papers investigation, which revealed secret accounts of various heads of state and business leaders.

On the other hand, Andes Iron, the operating company for the project, is actively seeking strategic partners to facilitate the sale of future production.

In a statement released prior to the dismissal of the project, the company said: “We continue to trust that justice and the rule of law will prevail and that our project will be able to materialise.”