This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 11/1/2018
Overview
Chile is the world’s number one producer of copper, iodine, molybdenum, and rhenium.  The mining sector accounts for approximately 10% of Chile’s GDP, which in 2017 was approximately $270 billion.  Copper alone represents about 50% of Chile’s total exports, and the industry also demands imports for key inputs for copper extraction, such as fuel, heavy equipment, and various technologies used in the mining process.  Chile is also the world’s #2 producer of lithium, which is forecast to increase in the years ahead.

As of July 2018, the Ministry of Mining's Sustainable Development Division lists 123 projects with approved Environmental Qualification Resolutions (EQR), valued at nearly $34 billion. If completed, these 123 projects would generate an estimated 66,900 jobs in their construction phase and 36,607 jobs at the time of their operation. Most of these projects (80) are proposed for the northern regions of Antofagasta and Atacama, which are home to Chile’s most important mining reserves and operations.

In 2016, according to the USGS, Chile produced 5.55 million tons of copper, which represented 27.6% of the world’s production.  The Chilean copper commission (Cochilco) projects 2018 production will approach 5.76 million tons, which would represent a 4.3% increase from 2017 totals.

The U.S. remains the single largest mining parts and equipment supplier to Chile, with about 30% market share.  Best prospect export opportunities in this industry include technologies and innovative products that reduce operational costs, improve productivity, increase efficiency, and offer environmental benefits to foster cleaner, safer processes.  Freeport-McMoRan Copper & Gold, based in Phoenix, Arizona, and Albemarle Corporation (lithium), based in Charlotte, North Carolina, are the two major U.S. mining extraction companies present in Chile.  Several other major foreign mining companies are operating in Chile from Canada, Australia, and Europe.

Copper production is forecast to increase 13.9% by 2028, as compared to 2017 extraction levels. However, such forecasts are contingent upon key expansion projects and technology advancements in Northern Chile.  Chile's mining project pipeline remains robust, particularly for milling and leaching projects.  Increased forecast growth has revived some projects, as investors reconsider expansion and development initiatives previously thought to be untenable. While copper market conditions have gradually improved since the last downturn in 2015, optimism is tempered by some regulatory hurdles and social resistance associated with the industry’s growth in Chile.  However, recent political decisions on labor and energy policy have been favorably regarded by some mining industry leaders.

In 2015, the average price of copper was $2.49/lb., a dramatic downturn from prices topping $4/lb. in 2011.  Copper prices for 2017 started low in Q1 and Q2, but picked up thereafter to close the year at $3.24/lb.  In August 2018, Cochilco forecasted long-term copper prices at $3.06/lb.

Copper is not the only mineral of importance to Chile.  In 2016, Chile produced 37% of the world’s lithium. Current production levels place the country as the world’s second-largest lithium producer after Australia.  In 2016, according to the USGS, Chile had 46.9% of the world’s lithium reserves.  Lithium is vital to the production of electric vehicles and batteries, so surges in lithium demand can be expected as the electric vehicle industry expands. Currently, there are only two companies active in the industry: Soquimich S.A. (SQM) and Albemarle. In May 2018, SQM announced the sale of shares held by 24% minority investor, Nutrien (Canada), to Tainqi (China), pending Chilean regulatory approval.

In recent years, the broader mining industry has invested not only in mining development and expansion, but also in cost reduction via energy independence. Renewable energy companies – primarily solar and wind – have negotiated private deals with mining companies looking to reduce energy costs while appeasing social and regulatory demands for carbon footprint reduction. 
 
 2015201620172018 estimated
Total Local Production304256258 226
Total Exports209203222202
Total Imports1,5221,1561,2911,131
Imports from the US501264307252
Total Market Size1,6171,2091,3271,155
Exchange Rates: 1 USD654677649640
(total market size = (total local production + imports) - exports)
Units: Millions of USD
Source: Chilean Customs Data, industry experts. (*) Central bank; December average.

Leading Sub-Sectors
The following is a list of mining parts, equipment and technologies in demand:
  • Equipment that requires regular replacement:
    • Crushers
    • Grinders
    • Off-road trucks (240-440 tons)
    • Cabbed truck chassis (+ 50 tons)
    • Parts for rock cutters
    • 360-degree revolving excavators
    • Cranes and screening machines
  • Environmental system solutions
    • Water treatment
    • Water desalination
    • Air pollution abatement
    • Mine closure technology
    • Carbon footprint reduction
    • Dust control technology
    • Arsenic management in smelters
  • Underground mining technology services
  • Wear-resistant materials
 
Opportunities
Industry projections indicate that between 2017 and 2024, investments by the private and public sector will be in the range of $25–30 billion, and U.S. exporters will remain an important supplier of quality products to Chilean importers.
In Chile, there are two mining trade shows held in alternate years, EXPOMIN and EXPONOR. 
  • EXPOMIN is the world’s largest mining trade show outside of the U.S.  The Expo’s global attendance draws about 1,600 exhibitors, with well over 100 exhibitors in the U.S. Pavilion.  EXPOMIN takes place on even-numbered years in Santiago. The next EXPOMIN will take place from April 20-24, 2020.
  • EXPONOR is Chile’s second-largest mining trade show after EXPOMIN.  The show takes place in the Northern Chile mining city of Antofagasta  in odd-numbered years so the next EXPONOR will take place from May 27-30, 2019.  The U.S. Pavilion at EXPONOR generally features about 70 exhibitors. 
 
Web Resources  
For additional information, please contact CS Santiago Commercial Specialist Marcelo Orellana Marcelo.Orellana@trade.gov.

 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Chile Energy Trade Development and Promotion