CHILE: Mining Industry

CLIMATE

The mining industry has been clear in its support for conservative and pro-business President SebastiánPiñera(source).

The military is funded through mining royalties, which tends to keep the country pro-mining. (Source: caseyresearch.com)

Chile is very open to foreign investment, with investors signing a contract directly with the Chilean gov’t as authorized under foreign investment statute DL 600. These contracts allow foreign investors to receive non-discriminatory treatment, to participate in any kind of investment (with few restrictions) and to hold assets indefinitely. (Source)

  • The Chilean gov’t is prohibited from unilaterally modifying investment contracts.
  • Foreign investors may request a maximum of 3 years to implement their investments.
  • Much of Chile’s investment regulations are influenced by the 2004 US-Chile free trade agreement.
  • Performance requirements or incentives are not implemented by the Chilean Foreign Investment Committee.

Chile ranked 49th out of 183 countries in the World Bank’s Ease of Doing Business report (source).

According to the last Fraser Institute Report ( from a universe of 68 worldwide mining districts, Chile appears in 6th place of the Policy Potential Index, while México (24º), Peru (28º), Brazil (39º) and Argentina (43º), are the following countries in the Latin American Region. The Policy Potential Index serves as a report card to governments on how attractive their policies are to invest in a given country, from the point of view of a mining exploration manager. (source)

INCIDENTS

Small-scale bombs often attributed to anarchist groups and limited violence in land claims by Mapuche indigenous people are the extent of security threats in Chile. (Source)

Mining strikes have been persistent in Chile, the most recent one occurred in late March at Los Bronces mine, owned by AngloAmerican (source)

Codelco workers struck briefly for approximately 24 hours in January (source).

COMMODITIES

Production

Metric tons, 2009

Chile / World / Chile as pct of World / Chile Rank
Arsenic / 11,500 / 53,500 / 21.5% / 2
Boron / 580,000 / 4,500,000 / 12.9% / 2
Copper / 5,320,000 / 15,800,000 / 33.7% / 1
Lithium / 7,400 / 18,000 / 41.1% / 1
Molybdenum / 32,000 / 200,000 / 16.0% / 3
Rhenium / 28 / 57 / 48.0% / 1
Selenium / 70 / 1,500 / 4.7% / 5
Silver / 2,000 / 21,400 / 9.3% / 4

(Source: USGS)

VALUE

The mining industry in Chile generated over $21 billion in 2009, or about 13 percent of GDP (source).

Currently, there are over $18 billion in identifiable projects scheduled to break ground by 2015, but development will heavily depend upon the improvement of copper prices and the international financial markets. (Source)

LEADING COMPANIES

Anglo American (link)

Anglo American owns 44% of the Collahusicooper and molybdenum mine in Chile, Xstrata owns 44% and Mitsui owns 12%. The company also owns the Chagres copper project, the El Soldado copper mine, Los Bronces copper and molybdenum mine, the MantosBlancos copper mine and the Mantoverde copper mine (source).

Austral Gold (link)

Austral Gold is an Australian-listed firm that owns the Guanaco CompañiaMinera which manages its Chilean operations (source). The company owns the Guanaco gold deposit 220 kilometers southeast of Antofagasta (source) and the Aminsa gold and copper exploration joint venture with Argentina Minera S.A. in San Juan province (source).

Guanaco Project (gold)

BHP Billiton (link)

BHP Billiton owns 57.5% of the Escondida copper mine located 170 kilometers southeast of Antofagasta (source). Approximately 360 million tons of minerals are moved annually through this mining project. This mine produces copper concentrate which is pumped via pipeline to the port of Coloso to a BHP Billiton-owned filter plant.

Corporacion Nacional del Cobre de Chile (CODELCO)(link)

CODELCO was created in 1976 and is administered by the Chilean government (source). CODELCO’s divisions are: the Salvador Division, which operates the Inca, CampamentoAntiguo and Damiana Norte mines; the VentanasDivison; the Andina Division and the El Teniente division. Main company projects include the RadomiroTomicsulphuric minerals mine (source), the Chuquicamata copper and molybdenum mine (source), the Ministro Hales mine, which is expected to be completed by 2013 (source) and the Gabriela Mistral copper deposit (source). The company also operates the El Teniente copper mine, which has an estimated 2.5 billion tons of copper reserves (source).

Freeport –McMoran Copper and Gold (link)

Freeport-McMoran Copper and Gold operates the Candelaria, Ojos del Salado (source) and El Abra (source) mines in Chile. The Candelaria and Ojos del Salado mines are 80% owned by Freeport-McMoran and 20% owned by Sumitomo Corporation. The El Abra mine has the capacity to produce an estimated 350 million pounds of copper each year.

PBX

PBX owns the Copaquire copper, molybdenum and rheniuym porphyry mining project (source); the Sierra Pintada copper and gold deposit (source); the Palo Negro and Hornitos silver, gold and copper deposits (source); the Tierra del Oro gold, copper, silver and cobalt deposits (source) and the Tabaco copper deposits (source).

Copaquire (copper, molybdenum, rhenium porphyry) (link)

Sierra Pintada (copper, gold) (link)

Palo Negro-Hornitos (copper) (link)

Tierra de Oro (copper, gold, silver, cobalt) (link)

Tabaco (copper) (link)