Chile Mining Report

Providing expert analysis, independent forecasts and competitive intelligence on the mining.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Petrochemicals Risk Reward Index, Economic Forecasts, Company Profiles and Global, Regional and Country Industry Overviews.

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  • Get a full view of the competitive landscape to assess your market position
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Chile Mining Report
Product Price
$1,295.00

BMI View: Chile's mining sector will experienc e slow growth over 2016 to 2019, as copper prices only bottom out in 2016 and gold prices continue to fall. While the country will remain the top producer of the red metal, limited greenfield investment will stagnate output growth.

Chile Mining Industry Value Forecast (2014-2019)
2014e 2015f 2016f 2017f 2018f 2019f
Note: See Industry Forecasts for specific commodity growth forecasts. e/f = BMI estimate/forecast. Source: BCC, BMI
Mining Industry Value, USDbn 29.69 28.63 28.31 28.47 28.93 29.37
Mining Industry Value, USDbn, % y-o-y -3.75 -3.56 -1.13 0.57 1.60 1.53

Latest Updates & Structural Trends

  • Chile, the largest copper producer, will experience relatively flat growth over 2016 to 2019, as weak copper prices limit investment. We forecast Chile's annual copper production growth to average 1.6% over this period, increasing in volume from 6.0 million tonnes (mnt) in 2016 to 6.3mnt by 2019.

  • Chile's gold sector will experience limited growth over our forecast period to 2019 due to persistently low gold prices. We expect production to increase at an average y-o-y rate of 1.6% between 2015 and 2019, with output growing from 1.8moz in 2015 to 1.9moz by 2019.

  • Elevated operating costs, notably labour and power costs, will weigh on Chile's extractive sector, deterring investment particularly in light of lower costs in neighbouring Peru. While lower oil prices and a weaker Chilean peso on the back of US dollar strength will cap growth in input costs, providing a boon to miners facing subdued metal prices, the benefit will be outweighed by rising operating costs.

  • State-owned Codelco will remain Chile's largest copper miner as measured in output, and indeed the largest copper miner globally, through 2019. Nonetheless, the company recently pushed back its forecast for 2.0mnt of copper output annually to 2025, from its earlier target of 2020, due to disagreements with the Chilean government over annual investment levels. While the Chilean government recently agreed to provide USD4bn of financing to 2018, the firm also issued USD980mn worth of 30-year unsecured bonds in Q414 to raise additional funds for investment.

  • Other large global diversified miners, including Glencore Xstrata, Anglo American, BHP Billiton, and Rio Tinto, are active in the copper space and are either developing new projects or investing heavily in current ones. The rest of Chile's mining sector is made up of mid-sized miners that specialize in the production of a single mineral, such as copper or gold. London-headquartered Antofagasta is a growing copper producer that is expected to continue ramping up production at flagship mines Los Pelambres and Centinela. Although the firm reduced the 2015 output estimate twice, from 710kt to 665kt then again to 635kt, expansions and new projects coming online will support the firm's production targets over the medium and long term.

BMI Industry View
7
Table: Chile Mining Industry Value Forecast (2014-2019)
7
Latest Updates & Structural Trends
7
SWOT
8
Industry Forecast
10
Copper: Muted Growth Ahead For Copper Giant
10
Table: Copper Production Forecast (Chile 2014-2019)
10
Table: Chile - Major New Copper Projects & Expansions
10
Structural Trends
11
Gold: Weak Prices And High Costs To Curb Growth
14
Table: Gold Production (Chile 2014-2019)
14
Table: Chile - Major Gold Projects
15
Industry Risk Reward Ratings
17
Chile Risk/Reward Index
17
Rewards
17
Industry Rewards
17
Country Rewards
17
Risks
17
Industry Risks
17
Country Risks
18
Americas - Major Risks Across The Board
18
Regional Risks Increase Modestly
18
Weak Prices To Hurt, While Stronger Dollar A Net Gain
19
Table: Americas - Mining Risk/Reward Index
20
Regulatory Development
21
Commodities Forecast
25
Commodities Outlook
25
Table: BMI Commodities Price Forecasts
25
Competitive Landscape
26
Sectors
26
Table: Chile - Select Companies, Financial Data 2014
27
Company Profile
28
Antofagasta - Q1 2016
28
Latest Results
30
Table: Antofagasta - Financial Data
31
Codelco - Q1 2016
32
Latest Results
34
Table: Codelco - Financial Data
35
Global Company Strategy - Anglo American - Q1 2016
37
Company Strategy
39
Latest Results
40
Table: Anglo American - Financial Data
41
Regional Overview
42
Americas Mining: The Three Key Themes
42
Key Themes:
42
Regulatory Environment To Remain Mining Friendly
42
US Dollar Strength And Low Fuel Prices To Incentivise Output
43
Latin American Output To Eclipse The North
44
Global Industry Overview
46
Global Overview
46
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46
2
47
3
48
4
50
5
53
Methodology
55
Industry Forecast Methodology
55
Sources
56
Risk/Reward Index Methodology
57
Table: Weighting Of Indicators
58

The Chile Mining Report has been researched at source and features BMI Research's mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's Chile Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in Chile.

Key Benefits

  • Use BMI's independent industry forecasts on Chile to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in Chile's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Chile.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI’s key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Industry SWOT analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

  • Mining industry: Industry size (USDmn), real growth (%), % of GDP, employment (‘000), workforce as % of total workforce, average wage (USD).
  • Output: Production volumes (‘000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (USDmn) for all major metals, minerals, ores and gems mined in each state.
  • Commodity markets: Global demand, supply, stocks and benchmark prices (USD) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI’s Mining Risk Reward Index

BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing USD sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Mining reports are based on an extensive network of primary sources, such as multilateral organisations (UN, WB, IMF), national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.