The Chilean Mining Sector. Chilean Mining Council

Transcription

1 The Chilean Mining Sector Chilean Mining Council Miguel A. Duran Chairman November 2010

2 The Chilean Mining Council Association created in Associate members are the 17 largest mining companies operating in Chile. Private and public owned companies. National and multinational companies. The main objective is to advocate public policy and operational practices for a world class industry that is safe, profitable, innovative, environmentally and socially responsible, attuned to community needs and expectations. We work to have a valued Chilean mining industry achieving outstanding environmental, social and economic performance. Region I: Collahuasi Cerro Colorado Quebrada Blanca Region III: Candelaria Salvador Ojos del Salado Proyecto Caserones Proyecto Franke Mantoverde Region IV: Los Pelambres Andacollo Region VI: El Teniente Region II: Escondida Spence Chuquicamata Radomiro Tomic El Abra Mantos Blancos Lomas Bayas Michilla El Tesoro Zaldívar Esperanza Gabriela Mistral Region V: Andina El Soldado Metropolitan Region: Los Bronces N W E S 2

3 3 Associate members

4 Key Factors for Mining Development Mining Potential Political, Economic and Social Stability Stable Legal Conditions and Sound Public Policies Infrastructure Talent & Skills COMPETITIVE ADVANTAGE Source: Fraser Institute Mining Council 4

5 5 Mining Potential

6 Chilean Population Country Population (in millions) World Population (%) Chile 17 0,24% USA 297 4,53% Europe (*) 456 6,98% South Korea 48 0,74% China ,96% India ,51% Others ,04% (*) Europe 15 countries Source: Mining Council based on International Monetary Found information 6

7 Chilean Economy Country GDP (US$ Billions) GDP (%) Chile 114 0,26% USA ,10% Europe (*) ,26% South Korea 793 1,78% China ,01% India 775 1,75% Others ,84% (*) Europe 15 countries 7 Source: Mining Council, based on information from United Nations

8 Copper Production Chile: largest copper producer (35%) biggest known reserves (39%) Chile 35% Others 44% Copper Reserves Others 31% Chile 39% Perù 6% Australia 6% USA 9% China 7% Source: USGS & Cochilco Poland 5% Perú 6% Australia 5% USA 7% 8

9 CHILE: KEY FACTS Population: million (2008) Average Population Growth ( ): 1.06% Global rankings Chile UNDP Human Development Index (2009) 44/182 Labour Force: 7.19 million (2008) Unemployment Rate: 9.6% (2009 est.) Corruptions Perceptions Index (2009) 25/180 World Bank Doing Business Index (2010) 49/183 Real GDP (PPP): $ billion (2009 est) Real GDP (PPP) per capita: $ 14,700 (2009 est) Real GDP per capita Growth: -1.7% (2009 est) Average GDP pc Growth ( ): 3.7% Currency: Chilean peso (CLP) Inflation Indicator CPI: 1.5% (2009 est) PPI: 16.6% (2008) Real Short Term Interest Rate: 5.95% (2008) Average ST Interest Rate ( ): 9.09% Exchange Rate (CLP/US$): 558 (2009) Average Exchange Rate ( ): 549 Imports (US$Bn) International Trade Exports Imports Copper Non copper Consumer goods Oil Non-oil Capital goods Exports (US$Bn)

10 Cu price impact on chilean economy Otros 18,7% Agropecuario y Silvícola 2,6% Pesca 0,8% Minería (Cobre) 14,8% Servicios Financieros 16,4% PIB 2009 por Sector Económico Otros Minerales 2,1% Manufactura 13,1% 30% 25% $ 305,3 25,1% $ 323,3 23,9% $ 315, Comunicación 2% Transporte 6,0% Comercio 9,7% Construcción 8,2% Electricidad, Agua y Gas 5,2% 20% 15% 10% 5% 22,2% 21,8% 17,3% 15,6% 14,0% 12,8% $ 167,1 9,2% $ 130,2 8,4% $ 80,7 $ 234,2 19,3% 17,0% 16,9% 14,8% Nota: PIB expresado a Precios Corriente y Costo de Factores 0% Cu Cu + Otros Precio Promedio Cu 0 10 Fuente: Banco Central de Chile

11 Chilean Copper Production & Forecast (in millions Tons) 1,4 millions 6,15 millions Increased 4 times Production of Copper Mine production in Chile reached 5,361 TMT. Production of concentrates was 3,669 TMT, and SxEw was1,691 TMT. Smelter production reached 1,565 TMT and Refinery production 1,120 TMT. Production from private companies was 66.7%. Copper exports reached 33,351 millions US dollars. Source: COCHILCO ,3 millions Forecast Otras Minas El Tesoro Los Pelambres C. de Andacollo Michilla Lomas Bayas Q. Blanca Cerro Colorado Mantos Blancos Zaldívar Candelaria El Abra Sur Andes Collahuasi Escondida Codelco

12 Mining Investment Forecasts Investment in Gold-Silver and Copper Projects Million US Dollars Investments projected in August 2008, were US$ 18,04 billions, considering both copper and gold-silver up to That means Chile is an attractive country to invest in new projects & in exploration Explotation 12% Areas under no concession 77% Over 2012 Copper Minning Gold & Silver Exploration 11% 12 Note: Projected figures considering Cochilco s Report August 2008 Source: Cochilco Just 23% of the areas are under exploration or exploitation Source: National Service of Geology & Mining

13 Exploration and reserves Between 1985 and 2007 US$ millions were invested in exploration in Chile Results at 2007*: Copper known reserves grew up from million tons in 1985 = 18% world millions tons in 2007 = 39% world Exploration expenses in 2007: US$ 360 Millions This amount represents about 4,2% of the total world expenses in Exploration Mill. US$ Mining Exploration Expenses in Chile N/A * Figures for 2008 N/A at present 13 Source: Metal Economics Group

14 Political, Economic and Social Stability 14

15 Political Stability Since democracy was restored in 1990, Chile has enjoyed a period of political stability during which representative government has gradually gained in strength and depth. A center-left coalition Concertación por la Democracia formed in the 1980 s held office since 1990 up to March 2010, since then a conservative coalition, Alianza por Chile, replaced them. Political and economic rights are granted by Chile s political Constitution and are further guaranteed by an independent judicial system that has recently been modernized. 15

16 Economic Stability Chile s business environment is the result of a policy-driven strategy that has focused on building sound macroeconomic fundamentals and strong institutions, promoting competition and international integration, and creating a fairer society in which all citizens benefit from economic development. Economic growth has been accompanied by low inflation, a sharp drop in public debt, stable external accounts and strong international reserves. This achievements is the result of Chile s commitment to economic liberalization and free market policies, as well as of its pledge to maintain sound and responsible economic management. These comparative advantages are further enhanced by Chile s open economy, which has meant greater competitiveness, lower tariffs, increasing levels of foreign trade and rapid integration into world markets. As a result, Chile possesses a very attractive and dynamic business environment. According to the latest Business Environment Rankings published by the Economist Intelligence Unit (EIU), Chile is the world s 22nd most attractive country in which to do business and invest over the next five years. 16

17 Social Stability High economic growth and active social investment policies have gone a long way to reduce poverty. In 1990, 39% of Chileans lived below the poverty line, but by 2006, this has dropped to 13.7% The current government has continued to give priority to a social agenda that includes a major overhaul of Chile s health system, an ongoing educational reform and several social programs targeting the countries poorest families. These programs are designed to improve productivity and increase Chile s competitiveness, and to ensure that all the country s citizens share in the benefits of economic growth, as well. As a result, Chile has already met the Millenium Development Goal proposed by the UN General Assembly, of reducing extreme poverty by half between 1990 and In fact, in just 16 years, extreme poverty was reduced to a quarter, from 13% in 1990 to 3.2% in

18 Stable Legal Conditions & Sound Public Policies 18

19 A country that works Chile has comparative advantages as a result of stable legal conditions to conduct business and sound public policies. A growing network of Free Trade Agreements. Strong institutions High levels of transparency A stable regulatory regime, including tax, labour and environmental. Double taxation agreements. Worldwide Governance Indicators. 19

20 20 Infrastructure

21 Globally Connected Efficient transport and communications services and world-class seaport and logistical infrastructure all keystones of the country export-driven development strategy are crucial to bridge the geographic distance between Chile and other business centers throughout the world. As of november 2006, 34 world and regional airlines operated in Chile, of which 19 offered direct international flights. Chile s ports a mixed system that includes state-run facilities (10), privately owned ports (11) and private concessions within state ports (15) handle 74% of Chile s imports and 96.4% of its exports. The main international courier services, including DHL, FedEx, TNT and UPS, operate in Chile. The market, comprising a total of around 30 different firms, is considered highly competitive. Public-Private Partnerships: Building Domestic Infrastructure: The private sector has participated actively in the development of public infrastructure, delivering rapid progress in areas that could otherwise have become bottleneck for Chile s economic expansion. These projects include, Panamerican Highway, Provincial Airports, Urban Highways, Public Transport, Railways, Irrigation, Trade Infrastructure. 21

22 A Wired Country A number of rankings and studies by international institutions underline Chile s status as a wired country. In its 2006 e-readiness Rankings, the Economist Intelligence Unit (EIU) identified Chile as Latin America s most e-ready market, highlighting the fact that is broadband and mobile telephony penetration rates (at 5% and 75% respectively) were by far the highest in the region. Digital Economy generated sales worth an estimated of US$ 13.2 billion in E-commerce accounted for 65% of total digital economy sales. Since 2004, the availability of Wi-Fi has expanded rapidly in Chile as public hotspots have been created. Electronic Banking: The use of Internet has been incorporated very rapidly by Chile s banking industry, where it has become a standard tool. 22

23 23 Talent & Skills

24 Talented and Well-qualified Workforce Chile has a talented and well-qualified workforce, with skills that have evolved in line with the demands of the country s international exposure and integration. Main demographic, work and educational indicators are: Population 16.7 million Workforce 7 million Literacy 96 % Educational coverage: Pre-school 32.4% Primary 98.6% Secondary 90.0% Higher 31.4% Average labor force schooling 10.5 years Life expectancy 77.5 years Infant mortality rate 7.8 / However, labor demand & supply in the mining sector is a current and future issue, as it is in the rest of the world. 24

25 Labour Force & Safety in Mining ,33 79,12 80,82 Labour 84,85 92,44 89,09 87,03 Abut 90,000 people works in mining companies associated to the Mining Council. Considering this total, only 1,1% has suffer labour accidents, being the safest sector in Chilean economy Total mining around 3.9%. Members of the Mining Council 1,1% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% Source: National Statistics Institute (INE) 25 0% Mining & Quarries Services Electricity, Commerce Agriculture, Transport gas, Sylvic. & fuel & water & Fishing Communi c Construction Manufac.

26 26 Thanks