By Alicia Gutiérrez | 2025-05-19

SANTIAGO -- An early morning arson attack on April 20 targeted the Rucalhue hydroelectric plant in southern Chile. It marks the latest and most severe act of violence against a controversial project backed by a Chinese state-owned company.

According to local authorities, a group of 12 unidentified and armed individuals stormed the facility, setting fire to 51 trucks in what officials described as the most serious incident of its kind in the region in more than 30 years.

The plant, situated in the Bío-Bío region about 500km south of Santiago, is operated by Rucalhue Energía, a company controlled by the Chinese consortium International Water & Electric Corp. (CWE), a subsidiary of the state-owned China Three Gorges Corporation.

Valued at nearly $350 million, the project has been under development for over a decade and has faced sustained resistance from Indigenous communities, residents and environmental groups.

Compensation demands

During a May 12 to May 14 visit to China, Chilean Foreign Minister Alberto van Klaveren downplayed last month's arson attack. He called it an "isolated incident" based on preliminary investigations.

The comment came weeks after Chinese Ambassador to Chile Niu Qingbao held a news conference in Santiago, where he demanded compensation for economic losses from the April 20 arson and urged Chilean authorities to deliver "severe punishment" to those responsible.

Speaking through a Spanish interpreter, Niu called for "effective guarantees for the safety of Chinese nationals and projects," as well as a secure and stable business environment for Chinese investments in the country.

The unusually blunt remarks triggered a swift response from Chilean officials. Interior Minister Álvaro Elizalde condemned the violence but firmly defended Chile's sovereignty.

"We will not accept pressure," Elizalde told reporters on April 21, according to the news outlet Biobiochile. Chile will not allow either "extortion or violence intended to block investment, large or small."

"We will take all necessary measures to uphold the rule of law, as Chilean democracy requires," he added.

Van Klaveren addressed the issue of compensation while in Beijing, saying that such matters "depend precisely on our own institutions."

Tensions flare with China

A planned late-April visit by Indigenous residents to the Chinese embassy in Santiago collapsed after Chinese diplomats refused to receive them, citing security concerns.

The group had hoped to raise long-standing complaints about the Rucalhue hydroelectric project, a Chinese-backed initiative they say threatens their environment, culture and spiritual heritage.

The embassy's rejection deepened perceptions that Beijing prioritizes protecting its investments over engaging with Indigenous communities in the Bío-Bío region, where opposition to the $350 million project has simmered for over a decade.

Evaluna Morales, a representative of the Indigenous organization Malen Leubü, accused the Rucalhue hydroelectric project of destroying native vegetation and sacred sites in southern Chile.

"The project has already cut down many native and vulnerable species, trees that are medicinal, unique and irreplaceable in our culture," Morales told the Latin American Observatory of Environmental Conflicts (OLCA) in an April 28 story.

The development had destroyed an ngen, a spirit of nature central to Mapuche beliefs, said Morales. "They've violated many of our rights."

'There's intimidation'

The project blocks access to areas historically used by her community along the Bío-Bío River, including sites rich in lawen, which are medicinal plants that do not grow in the Upper Bío-Bío, said Morales. "They've already been destroyed," she said.

Indigenous communities have accused the Chilean state of backing foreign investments at the expense of ancestral lands.

"There's intimidation," Morales said. "The government is supporting international companies that continue to deepen the plunder of our territory."

Since the cancellation of the meeting, the Chinese ambassador has drawn rare media scrutiny and clashed publicly with prominent Chilean figures. In one exchange, he criticized veteran journalist Karin Ebensperger for a column in El Mercurio accusing China of undermining global and local trade through dumping and state subsidies.

In a letter published by the newspaper, Niu accused the columnist of parroting "Western media lies and insults" and of ignoring what he described as China's socioeconomic progress.

The arson attack on the Rucalhue plant in April, coupled with rising public tensions, has pushed Chile's relationship with China into one of its most strained moments in recent memory, amid broader scrutiny of Chinese business practices and diplomacy in the country.