business opportunities: chilean mining industry

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

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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) - PowerPoint PPT Presentation

TRANSCRIPT

Page 1: Business Opportunities: Chilean Mining Industry

Business Opportunities:Business Opportunities:Chilean Mining IndustryChilean Mining Industry

Carlos F. CapurroCarlos F. CapurroSenior Commercial AdvisorSenior Commercial Advisor

U.S. Commercial ServiceU.S. Commercial Service

Santiago, ChileSantiago, Chile

 

  

Image courtesy NASA GSFC, MITI, ERSDAC, JAROS, and U.S./Japan ASTER Science Team

Page 2: Business Opportunities: Chilean Mining Industry

Chile?Chile?

Page 3: Business Opportunities: Chilean Mining Industry

GeographyGeography

•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

Page 4: Business Opportunities: Chilean Mining Industry

Brief HistoryBrief 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

Democratic elections in

19891989

Page 5: Business Opportunities: Chilean Mining Industry

Chile TodayChile 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

Page 6: Business Opportunities: Chilean Mining Industry

Why Chile?Why Chile?

Page 7: Business Opportunities: Chilean Mining Industry

Sustained Economic GrowthSustained Economic Growth

1

2

3

4

5

6

7

1985-1989

1990-1994

1995-1999

2000-2004

2005 2006 2007

Chile

LatinAmerica &Carribean

Page 8: Business Opportunities: Chilean Mining Industry

Unemployment LevelUnemployment Level

9.7%

9.2% 9.2%

9.0%

8.5%

8.8%

8.1%

8.0%

7.20%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: Banco Central Source: Banco Central de Chilede Chile

Page 9: Business Opportunities: Chilean Mining Industry

Price StabilityPrice StabilityAnnual Inflation (%)Annual Inflation (%)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Page 10: Business Opportunities: Chilean Mining Industry

• Free Trade Agreements• Steady economic growth • Prudent fiscal policies• Stable democratic

government• Solid business practices• Rule of law

Business - Why Chile?Business - Why Chile?

Page 11: Business Opportunities: Chilean Mining Industry

U.S.-Chile Trade AgreementU.S.-Chile Trade Agreement

• 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 Visit our U.S. Exporters Guide to the US – Chile FTAU.S. Exporters Guide to the US – Chile FTA at http://www.buyusa.gov/chile/en/ftaguide.html at http://www.buyusa.gov/chile/en/ftaguide.html

Effective January 2004Effective January 2004

Page 12: Business Opportunities: Chilean Mining Industry

U.S.-Chile Trade U.S.-Chile Trade Merchandise/Goods Merchandise/Goods

(In US$ Billion)(In US$ Billion)

3.33.5 3.5

3.1

3.8

2.6

3.7

2.7

4.7

3.6

6.7

5.2

9

5.5

9 8.3

0

1

2

3

4

5

6

7

2000 2001 2002 2003 2004 2005 2006 2007

Imports from Chile Exports to Chile

Page 13: Business Opportunities: Chilean Mining Industry

• Construction• Computer Hardware / Software &

Services • Electric Power Equipment • Environmental Technologies &

Services• Financial Services• Food Processing & Packaging

Equipment

Best Prospects for Best Prospects for U.S. ExportsU.S. Exports

Page 14: Business Opportunities: Chilean Mining Industry

Best Prospects (cont.)Best Prospects (cont.)

• Medical Equipment & Healthcare• Mining Equipment• Plastics Machinery & Materials• Security Equipment & Safety• Telecommunications Equipment &

Services• Travel & Tourism

Page 15: Business Opportunities: Chilean Mining Industry

Market OverviewU.S. PositionCompetitorsCommercial

OpportunitiesOther Resources

Mining Industry OverviewMining Industry Overview

Page 16: Business Opportunities: Chilean Mining Industry

Market OverviewMarket 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%

Page 17: Business Opportunities: Chilean Mining Industry

• 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

Market OverviewMarket Overview

Page 18: Business Opportunities: Chilean Mining Industry

• 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

Market Size

Market OverviewMarket Overview

Page 19: Business Opportunities: Chilean Mining Industry

• 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.

Market OverviewMarket Overview

Page 20: Business Opportunities: Chilean Mining Industry

Foreign Direct Investment in MiningForeign Direct Investment in Mining($21.1 billion 1974-2006)($21.1 billion 1974-2006)

Canada (31.2% ) U.S. (25.9%)U.K. (19.4%) Australia (13.5%)J apan (6.6%) Others (3.4%)

Source: Chilean Foreign Investment CommitteeSource: Chilean Foreign Investment Committee

Market OverviewMarket Overview

Page 21: Business Opportunities: Chilean Mining Industry

Chile: Mining ImportsChile: Mining Imports

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2001 2002 2003 2004 2005 2006

U.S.A. Total Imports

Source: COCHILCO, based upon Chilean Customs Data (Sept. 2007)

Market OverviewMarket Overview

Bill

ion

Page 22: Business Opportunities: Chilean Mining Industry

Market Share by Main Supplying Market Share by Main Supplying CountriesCountries

Source: COCHILCO, based upon Chilean Customs Data (Sept. 2007)

Market OverviewMarket Overview

U.S.-Chile FTA

Page 23: Business Opportunities: Chilean Mining Industry

Competing Mining Suppliers Competing Mining Suppliers Market Share by CountryMarket Share by Country

(2007)(2007)

39%

13%

4%10% 9%

25%

USA Brazil Canada Germany Japan Other countries

Source: Chilean Customs Data

Page 24: Business Opportunities: Chilean Mining Industry

Copper Prices Copper Prices January 1998 – 2008January 1998 – 2008

($ cents/lb)($ cents/lb)

0

50

100

150

200

250

300

350

400

Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08

Source: Chilean Copper Commission – COCHILCO (www.cochilco.cl)

Feb 22, 2008 $ 378 cents /lb

Page 25: Business Opportunities: Chilean Mining Industry

New Copper Mining ProjectsNew Copper Mining Projects(2008-2015)(2008-2015)

0

2

4

6

8

10

12

14

16

Argentina Brazil Chile PeruInvestment (US$ billion) New Production (million tons) Exploration (US$ billion)

Source: COCHILCO: Based on companies press releases and own data compilation

Page 26: Business Opportunities: Chilean Mining Industry

How this translates intoHow this translates intoreal business?real business?

28%

19%

18% 15%

11%

9%

Energy Consumables - Plant

Parts & Pieces Fuel & Lube

Consumables - Mine Reagents

2005: $ 2.9 billion Operational Expenses

Page 27: Business Opportunities: Chilean Mining Industry

– Cranes– Screening machines – Environmental system

solutions (water treatment, air pollution/dust abatement, mine closures)

– Underground mining technology services

– Wear-resistant materials

Source: Revista Minería Chilena, Ministry of Mining, El Mercurio, Diario Financiero

– Off-road trucks (240-440 tons)

– Scoop shovels– Giant tires– Crushers – Grinders – Cabbed truck chassis

(+ 50 tons) – Part for rock cutters– Excavators

Capital Goods DemandCapital Goods Demand

How to translate all this intoHow to translate all this intoreal business?real business?

Page 28: Business Opportunities: Chilean Mining Industry

0 100 200 300 400 500 600

Parts

Equipment

Other Items

Consumables

Reagents

How to translate all this intoHow to translate all this intoreal business?real business?

2005: $ 1.7 billion 2005: $ 1.7 billion ImportsImports

Page 29: Business Opportunities: Chilean Mining Industry

How this translates intoHow this translates intoreal business?real business?

Source: COCHILCO, Dec. 2007

2007: 5.7 million tons of copper2007: 5.7 million tons of copper

Yearly DemandUS$

Million/Year

65 off road load trucks $247

19 giant front loaders $74

Drilling and underground transportation equipment

$22

24,800 tons Explosives $16

24 LHD $11

500 Tires $10

2011: 6.5 million tons of copper2011: 6.5 million tons of copper

Page 30: Business Opportunities: Chilean Mining Industry

Electronic Purchasing SystemsElectronic Purchasing Systems

• Quadrem www.quadrem.com

• CODELCO www.codelco.com

• Chile Compras www.chilecompras.cl

• SICEP www.sicep.cl

How to translate all this intoHow to translate all this intoreal business?real business?

Page 31: Business Opportunities: Chilean Mining Industry

A MustA Must

EXPONOREXPONOREXPONOREXPONORAntofagasta, June, 2009Antofagasta, June, 2009

www.exponor.clwww.exponor.cl

EXPOMINEXPOMINEXPOMINEXPOMINSantiago, May 2008Santiago, May 2008

www.expomin.clwww.expomin.cl

Page 32: Business Opportunities: Chilean Mining Industry

Need Help?Need Help?Count on Us!Count on Us!

U.S. Commercial ServiceU.S. Commercial Service

Carlos F. [email protected] [email protected]

Tel: 011-56-2-330-3307Tel: 011-56-2-330-3307

Fax: 011-56-2-330-3172Fax: 011-56-2-330-3172

Andres Bello 2800, Las Condes, SantiagoAndres Bello 2800, Las Condes, Santiago

ChileChile

Page 33: Business Opportunities: Chilean Mining Industry

Looking forward to see you Looking forward to see you soonsoon

in Chilein ChileMany thanks for you kind attentionMany thanks for you kind attention