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Business Opportunities: Chilean Mining Industry

Business Opportunities: Chilean Mining Industry. Carlos F. Capurro Senior Commercial Advisor U.S. Commercial Service Santiago, Chile. Image courtesy NASA GSFC, MITI, ERSDAC, JAROS, and U.S./Japan ASTER Science Team. Chile?. Geography. 2,600 miles long Just 100 miles wide (average)

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Business Opportunities: Chilean Mining Industry

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  1. Business Opportunities:Chilean Mining Industry Carlos F. Capurro Senior Commercial Advisor U.S. Commercial Service Santiago, Chile Image courtesy NASA GSFC, MITI, ERSDAC, JAROS, and U.S./Japan ASTER Science Team

  2. Chile?

  3. Geography • 2,600 miles long • Just 100 miles wide (average) • Diverse climate and geography • Opposite seasons from the U.S.A. • Isolated by mountains, desert and sea • 16 million population • Principal city and capital - Santiago

  4. Brief History • Spanish Colony 1541 – 1810 • Socialists take power 1970 • Military coup 1973 • “Chicago Boys” take charge • Open economy begins to grow - 1974 • Structural changes - 1981 Democratic elections in 1989

  5. Chile Today • President Michelle Bachelet took office March 11, 2006 (2006-2010) • “Concertacion” Coalition • Socialists • Party for Democracy • Christian Democrats • Broad Consensus – No Change • Open Economy – Free Market • Democratic Institutions

  6. Why Chile?

  7. Sustained Economic Growth

  8. Unemployment Level Source: Banco Central de Chile

  9. Price StabilityAnnual Inflation (%)

  10. Business - Why Chile? • Free Trade Agreements • Steady economic growth • Prudent fiscal policies • Stable democratic government • Solid business practices • Rule of law

  11. U.S.-Chile Trade Agreement Effective January 2004 • 95% + of bilateral trade in goods duty-free • 75% + of U.S. farm goods duty-free by 2008 • Stronger protection of intellectual property rights (IPR) • Open and fair government procurement • Commitments on labor rights and environmental protection Visit our U.S. Exporters Guide to the US – Chile FTA at http://www.buyusa.gov/chile/en/ftaguide.html

  12. U.S.-Chile Trade Merchandise/Goods (In US$ Billion)

  13. Best Prospects for U.S. Exports • Construction • Computer Hardware / Software & Services • Electric Power Equipment • Environmental Technologies & Services • Financial Services • Food Processing & Packaging Equipment

  14. Best Prospects (cont.) • Medical Equipment & Healthcare • Mining Equipment • Plastics Machinery & Materials • Security Equipment & Safety • Telecommunications Equipment & Services • Travel & Tourism

  15. Mining Industry Overview Market Overview U.S. Position Competitors Commercial Opportunities Other Resources

  16. Market Overview • Mining explains 7.8% of Chile’s GDP and 66% of the nation’s overall exports in 2007. • Chile is the world’s number one producer of: • Copper 37.5% • Molybdenum 28.1% • Sodium & Potassium Nitrate 100% • Lithium 42% • Iodine 55%

  17. Market Overview • Chile is also a large producer of: • Borates (9.9%) • Silver (7.3 %) • Gold (1.8 %) • Rhenium • And produces substantial amounts of gold and silver

  18. Market Overview Market Size • 130 Mining companies (5.7 million tons) • 18 companies produce 70% • 275 supplying companies • APRIMIN: 50 companies – Selling US$ 3.5 billion (47% imp.) • 1,800 reps/distributors • 2,500 products & services

  19. Market Overview • Expects to average annual growth of 6% from 2008-2015 • Projected investments exceeding US $15 billion • Foreign investment has been the key: 1974-2006 $21 billion or 33% of all foreign investment.

  20. Market Overview Foreign Direct Investment in Mining($21.1 billion 1974-2006) Source: Chilean Foreign Investment Committee

  21. Chile: Mining Imports Market Overview Billion Source: COCHILCO, based upon Chilean Customs Data (Sept. 2007)

  22. Market Share by Main Supplying Countries Market Overview U.S.-Chile FTA Source: COCHILCO, based upon Chilean Customs Data (Sept. 2007)

  23. Competing Mining Suppliers Market Share by Country(2007) Source: Chilean Customs Data

  24. Copper Prices January 1998 – 2008($ cents/lb) Feb 22, 2008 $ 378 cents /lb Source: Chilean Copper Commission – COCHILCO (www.cochilco.cl)

  25. New Copper Mining Projects(2008-2015) Source: COCHILCO: Based on companies press releases and own data compilation

  26. How this translates intoreal business? 2005: $ 2.9 billion Operational Expenses

  27. Cranes Screening machines Environmental system solutions (water treatment, air pollution/dust abatement, mine closures) Underground mining technology services Wear-resistant materials Off-road trucks (240-440 tons) Scoop shovels Giant tires Crushers Grinders Cabbed truck chassis (+ 50 tons) Part for rock cutters Excavators How to translate all this intoreal business? Capital Goods Demand Source: Revista Minería Chilena, Ministry of Mining, El Mercurio, Diario Financiero

  28. How to translate all this intoreal business? 2005: $ 1.7 billion Imports

  29. How this translates intoreal business? 2007: 5.7 million tons of copper 2011: 6.5 million tons of copper Source: COCHILCO, Dec. 2007

  30. How to translate all this intoreal business? Electronic Purchasing Systems • Quadrem  www.quadrem.com • CODELCO  www.codelco.com • Chile Compras  www.chilecompras.cl • SICEP  www.sicep.cl

  31. A Must EXPONOR • EXPOMIN • EXPOMIN • Santiago, May 2008 • www.expomin.cl • EXPONOR • Antofagasta, June, 2009 • www.exponor.cl

  32. Need Help?Count on Us! U.S. Commercial Service Carlos F. Capurro carlos.capurro@mail.doc.gov Tel: 011-56-2-330-3307 Fax: 011-56-2-330-3172 Andres Bello 2800, Las Condes, Santiago Chile

  33. Looking forward to see you soonin Chile Many thanks for you kind attention

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