Mining in Chile
Latam is a major supplier of metals worldwide
Commodit
y
Chile
Perú
Brasil
Mexico
Copper
1
2
4
3
Silver
3
2
4
1
Gold
4
1
3
2
Chile accounts for:
• 33 % of world Copper Production, and +30%of world copper
reserves.
• #1 world producer of molybdenus, Lodine, Lithium, and natural
nitrates;
• 15% of gold and 3% of silver.
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Chilean Market
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Chile is the best evaluated economy in Latin America and, indeed, one of the
best evaluated among emerging economies worldwide
Favorable investing environment:
According to the Business Environment Rankings of the Economist Intelligence
Unit (EIU), Chile is one of the 20 most attractive economies in which to do
business between 2010 and 2014 and leads Latin America in this field.
Santiago had the 8th cheapest rents out of the main 15 Latin American capitals
(average US$36.41 per year per square foot)
The Chilean business/commercial positive background is built and strengthen
by a transparent and protective legal framework; stable economic
fundamentals; safe and pleasant living conditions; low costs of opening
business starting a business.
Australian companies have found Chile to have positive conditions for
employing workers, enforcing contracts, getting credit, closing a business,
registering property, protecting investors, dealing with licenses, paying taxes
and trading across borders
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Chilean Mining Industry
• Mining activity accounts for 60 % of 2011’s exports and 12 % of
the GDP
• Chile contributes with 33 % of world copper production, and
+30% of world’s copper reserves.
• Major producer of Lithium, Iodine and Rhenium, gold, silver and
molybdenum.
• Mostly hard rock mining and open cut operations, but operations
are moving strong into underground mining
• Highly competitive market, World's best technologies and
companies are here.
• Strong growing production rates and investment in the pipeline
• Planned Investment in Chilean copper and gold mining is
expected to exceed US$100 billion for 2020. One driver for
investment is the Exhaustion of deposits and declining ore
grades
• Industry is forecasting a gap of 45,000 new professionals by
2020 in order to fulfil projected growth and investment needs
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Chilean Mining Industry
• Safety in mining :Major mines have global highest industry
standards. chances of having an accident in are lower than
banking industry. Always important and opened fro new solutions.
• Mine closure and remediation is an opening area of opportunity.
Recently regulated (2012) and being a requirement for approval
of new projects, it opened a whole new area of business.
• Key Market entry actions/opportunities: Participate at
Expomin (Santiago) and or Exponor (Antofagasta) mining shows,
and Austrade’s business program around those.
• Environmental issues increasingly important: Water
management is critical and several technologies and actions
are been undertaken (desal plants, other recovery
technologies)
• Community relations is increasingly important and has stoped
important investments.
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Size of Chilean Copper Mines and their
share of World Production
Rest of the World
4,000
21%
33%
Chile
62%
MT thousand
3,000
2,000
1,000
0
Small
Medium
Large
0-140
140-400
>400
Mine size (annual production 2005)
Source: Brook Hunt
Chile’s Main Copper Mines
Region I:
Collahuasi
Cerro Colorado
Quebrada Blanca
Region II:
Escondida
Spence
Chuquicamata
Radomiro Tomic
El Abra
Mantos Blancos
Lomas Bayas
Michilla
El Tesoro
Zaldívar
Esperanza Project
Gaby Project
Region III:
Candelaria
Salvador
Ojos del Salado
Regalito
Region V:
Andina
El Soldado
Region IV:
Los Pelambres
Andacollo
Metropolitan Region:
Los Bronces
Region VI:
El Teniente
Source: Cochilco
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Major considerations to doing business in this
industry:
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Understanding the Mine companies structure (projects, procurement, site vs. HQ, final
users), and developing the right contacts and network (allies, industry bodies, potential
partners)
Management and key decision makers change too often, and suppliers have to be up to
date with their “key clients”, be highly responsive (if not pro-active) to clients demands.
Be ready to present your business contribution (innovative solution, costs), and adjust to
time and resources constraints from procurement departments.
As a highly competitive market all brands/products of the world can be found in the
market. Procurement managers at big mining companies are looking for “Business
relationships” with their suppliers instead of just sending brochures by e-mail and doing
one off sales. This is specially critical once initial deals have been done.
Setting operations in Chile gives a much better perception to the local business
community/industry, and sets the ground for more business.
Although is friendly and business oriented culture, there are language and cultural
differences.
Perception of distance and cost, and lack of local presence to support 24/7 the mine
operations needs.
Mines often in remote locations/altitude. How to service?
Tremendous shortage of labour (particularly technical)
Chile is looking for suppliers that can create a local capacity in the Mining Cluster
located in the North of Chile. This strategy is supported co-led by BHP Base Metals and
Codelco.
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Positives
• US$100 billion valued pipeline of new projects and expansions
in mining 2012-2020.
• Hungry for best practice and new solutions.
• Australia is well recognized and positioned as a source for
innovation and smart solutions in the industry.
• Limited domestic industry issues.
• 1 month timeframe to have a company up and running.
• Can build a local team confidently.
• Favorable geography: Short distances from sea shores to
Andes Mountains, from cities (Antofagasta, Iquique, Copiapo) to
mine sites.
• According to the World Bank “Doing business 2012” report,
Chile is the easiest Latin American economy in which to do
business.
• Efficient transport and communications services and world-class
seaport, airport and logistics infrastructure.
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What can Austrade do to help?
• Organised market visit – meet who you need to know
• Network of referrals to lawyers, accountants, interpreters
and translators
• Assistance with government liaison in market
• Network with Australian mining companies and
suppliers/engineering firms
• Participate in our Australian pavilions
• Join the linkedin group
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