CHILE · MARKETS
Key Facts
- —What is happening Chile’s CMPC received the preliminary environmental licence for its Natureza pulp mill in Barra do Ribeiro, Rio Grande do Sul, from the state agency Fepam on Thursday, 22 October 2026.
- —Why it matters The licence is the first of three environmental permits for the mill, but it does not allow construction, and CMPC says it is still optimising the investment and weighing financing.
- —The numbers The mill would make 2.5 million tonnes of eucalyptus pulp a year for about US$4.6 billion, employ about 12,000 people during construction and stand 35 kilometres from CMPC’s Guaíba mill.
- —Who is who CMPC is a Santiago-listed Chilean forestry, pulp and paper group linked to the Matte family. Fepam is the state environmental foundation, and federal prosecutors (MPF) contest the consultation of Indigenous communities.
- —What to watch The installation licence from Fepam, the court dispute over consulting Indigenous and traditional communities, and CMPC’s own investment decision, for which no date has been given.
- —Power Index Chile ranks 3rd of 14 in The Rio Times Latin America Power Index, with 63.6 points (October 2026 edition).
- —What it means for you US investors in CMPC or in global pulp should read the licence as one hurdle cleared, because the US$4.6 billion spending decision, weak pulp prices and financing are still open.
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Chile’s CMPC won the state environmental permit for its Natureza pulp mill in southern Brazil on Thursday, 22 October. The project costs about US$4.6 billion, and CMPC has not yet committed to build it.
Chile’s CMPC, a forestry group linked to the Matte family, has cleared the first environmental hurdle for its Natureza pulp mill. Fepam, the Rio Grande do Sul state environmental foundation, granted the preliminary licence on Thursday, 22 October.
The mill would cost about US$4.6 billion, Diario Financiero reports. The permit does not allow construction, and the company still has to decide whether to build.
What the Preliminary Licence Allows
Fepam issued licence number 00118/2026 at 11:41 on Thursday, 22 October, Jornal do Comércio of Porto Alegre reported. The licence is valid until October 2031 and recognises the project’s environmental viability at the proposed site.
It does not authorise building, which needs an installation licence and later an operating licence. After the installation permit, Diario Financiero reports, CMPC will assess whether the project goes ahead.
Antonio Lacerda, head of CMPC Celulose Brasil, called the licence an important step reflecting the work of authorities, communities and the company. He described Natureza as strategic for competing globally.
Conversions in this article use the rate of 23 October 2026, 5.04 reais to the US dollar, from open.er-api.com. Company statements come from Brazilian outlets that reproduced them, because no CMPC filing or release on the licence could be opened.
What Natureza Would Build
The plant in Barra do Ribeiro, near Porto Alegre, would make 2.5 million tonnes of short-fibre eucalyptus pulp a year. It would stand about 35 kilometres from CMPC’s existing Guaíba mill.
CMPC estimates synergies of more than US$50 million a year from that closeness, Diario Financiero reports. The plan also sets aside US$420 million for roads and US$150 million for a new port terminal at Rio Grande.
Brazilian outlets put the whole package at 27 billion reais (about US$5.4 billion), while Diario Financiero gives US$4.6 billion. The reports do not explain the gap.
CMPC says construction would employ about 12,000 people. Jornal do Comércio reported that a Rio Grande terminal contract signing was set for 9 September.
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Why the Permit Took So Long
CMPC first expected the permit in the first half of 2026, Diario Financiero reports. Questions over consulting Indigenous and traditional communities pushed the timetable back.
In March, Brazil’s federal prosecutors (MPF) recommended suspending the licensing until Indigenous communities were consulted. In May they sued to make the process also respect quilombola communities, descended from enslaved people, and small-scale fishers.
In September a federal appeals court rejected an MPF appeal that sought to halt the process. The licensing could therefore continue before Fepam.
On Tuesday, 20 October, Funai, Brazil’s Indigenous affairs agency, said it had finished consulting Kaingang representatives, the outlet ClicR reported. It would issue a favourable opinion on the project.
The prosecutors’ 13 May suit asks for prior consultation under ILO Convention 169 and revised impact studies. The court dispute over how far the consultations must reach remains part of the licensing story.
The Money Question Behind the Mill
In April, CMPC chairman Bernardo Larraín Matte said the company was working toward an investment decision this year, Diario Financiero reported. The company planned to raise US$1 billion to US$1.5 billion by selling assets.
CMPC’s profit fell 59% in 2025 to US$202 million, from US$491 million in 2024, the same report said. Fitch and S&P also cut its credit ratings.
Analysts are split on Natureza. Bci analyst Pérez sees US$600 million to US$700 million of extra yearly EBITDA, a profit measure.
Pérez says the mill would lift CMPC’s pulp capacity by more than 50%, The Clinic reported in September. CMPC also agreed on 21 October to sell Maule forest land to J.P. Morgan for US$365.5 million.
Others argue CMPC should wait, because extra pulp would push prices lower, The Clinic reported in September. CMPC commercial chief Guillermo Viesi said international pulp prices had hit bottom, the same report said.
What It Means for US Readers
US investors can follow CMPC through its Santiago shares and its debt, or through rivals in global pulp. The licence removes one risk, but not the main one, which is whether CMPC commits US$4.6 billion while pulp prices are weak.
A 2.5 million tonne mill would add supply to a global market that has already seen prices fall. Any effect on prices is years away, because construction has not started.
Background is in the CMPC forest land sale, the broker price floor view and the pulp rebound report. See also the packaging sale, the CMPC company profile, Chile coverage and Brazil coverage.
What Is Not Known
CMPC has not said whether it will build, or when it will apply for the installation licence. No CMPC notice on the licence appeared on the CMF site, and Fepam’s licence document could not be opened here.
Diario Financiero cites US$4.5 billion in April and US$4.6 billion in October; Jornal do Comércio cites 27 billion reais (about US$5.4 billion). The reports do not reconcile them, and operating job estimates differ between CMPC and The Clinic.
Funai’s position is unclear: ClicR reported on 22 October that it would issue a favourable opinion, which Diario Financiero repeated. On 11 June Funai had called reports of its support for the project erroneous, Jornal do Comércio reported.
No response from the prosecutors to the licence was found, so a new court challenge cannot be ruled out or confirmed. How CMPC shares reacted is not known either.
What Comes Next
CMPC must now obtain an installation licence from Fepam, followed by an operating licence. No date has been given for either step.
The company says it will also work on optimising the investment and on its commercial, financing and risk strategy. It has not said that the licence amounts to a final investment decision.
Frequently Asked Questions
What did CMPC receive on 22 October?
Fepam, the Rio Grande do Sul environmental foundation, granted CMPC the preliminary licence for its Natureza pulp mill in Barra do Ribeiro. It recognises environmental viability but does not allow construction.
How much will the CMPC mill cost?
Diario Financiero puts the project at US$4.6 billion, while Brazilian outlets cite 27 billion reais (about US$5.4 billion) for the wider package. The reports do not explain the difference.
How much pulp would Natureza make?
The mill is designed for 2.5 million tonnes of short-fibre eucalyptus pulp a year. That would raise CMPC’s pulp capacity by more than 50%, according to a Bci analyst.
Has CMPC decided to build the mill?
Not yet, because it still needs an installation licence. Diario Financiero reports that CMPC will then assess whether the project goes ahead.
Why were Indigenous communities part of the story?
Federal prosecutors said the licensing needed proper consultation of Indigenous and traditional communities. Funai said on 20 October it had finished consulting Kaingang representatives, ClicR reported.
Sources: Diario Financiero, 22 October; Jornal do Comércio, 22 October; Repórter Guaibense, 22 October (CMPC statement); ClicR, 22 October; Diario Financiero, 23 April; Jornal do Comércio, 11 June; Jornal do Comércio, 3 September; MPF, 13 May; The Clinic, 6 September; exchange rate, open.er-api.com, 23 October (all accessed 23 October 2026).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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