Chile Mining Report

Published 02 March 2015

  • 80 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
Chile Mining Report

BMI View: Chile's mining sector will see modest average annual growth of 1. 6 % in 201 5 -201 9 . T he country's stable political and business environments , combined with its significant mineral reserves , will encourage continued investment . Nevertheless, older mines will still face lagging productivity, while subdued copper and precious metal prices will limit sector growth and miners' expansion plans .

The Chilean mining sector will be dominated by copper production for the foreseeable future. In 2014, the metal accounted for approximately 92% of mining exports as measured in dollar terms and nearly 55% of the country's total exports. However, the latter represents a decline from 2010, when copper accounted for slightly over 58% of the country's total exports. Ultimately, we expect the mining industry to be hit by lower copper prices, which we forecast will see only a modest recovery in the years ahead. For 2015, we forecast prices will average USD5,750/tonne. Still, the pipeline of copper projects and the country's global dominance in copper production will ensure the country maintains its lead despite falling ore grades and lagging productivity. Moreover, 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.

Further Investment, But Only Modest Sector Growth

State-owned Codelco will remain Chile's largest copper miner as measured in output, and indeed the largest copper miner globally, through 2019. The company recently pushed back its forecast for 2.0mnt of copper output annually to 2025 though, 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.

Mining Share Of Exports...

Table of Contents

BMI Industry View
7
Large & Mid-Tier Players To Invest In Years Ahead
7
SWOT
9
Industry Forecast
10
Copper: Global Dominance Assured Through 2018
10
Elevated Costs Reduce Competitiveness
12
Table: Chile - Major Copper Investment Projects
13
Table: Copper Production Forecast (Chile 2010-2018)
13
Silver: Modest Growth Yet Production To Remain Below Historic Peak
14
Base & Precious Metal Miners To Develop Silver Deposits
15
Table: Chile - Key Silver Mine Projects
15
Table: Silver Production (Chile 2010-2018)
16
Gold: Diversification Opportunity, But Risks Remain
16
Gold Adds To Sector Diversity, But Copper Still Dominates
17
Table: Chile - Major Gold Projects
18
Challenges Ahead For Production
18
Table: Gold Production Forecast (Chile 2010-2018)
18
Industry Risk Reward Ratings
19
Risk/Reward Rating
19
Rewards
19
Industry Rewards
19
Country Rewards
19
Risks
20
Industry Risks
20
Country Risks
21
Table: Chile - Mine Production & Growth
21
Risk/Reward Ratings
21
Significant Rewards For Some, But Risks Abound
21
Weaker Prices To Remain Headwinds
22
Modest Shift In Rankings
23
Table: Americas - Mining Risk/Reward Ratings
24
Regulatory Development
25
Regulatory Environment Still Solid, But Challenges Ahead
25
Tax Regime
25
Corruption Remains In Check
26
Table: Chile - Political Overview
27
Table: Regional Regulatory Index
28
Commodities Forecast
29
Commodity Strategy
29
Ferrous Metals:
29
Steel: Prices To Remain Subdued
31
Non-Ferrous Metals:
32
Aluminium: Price Strength To Continue In Q314
32
Copper: Further Decline By Year's End
33
Lead: Constructive Price Outlook
34
Nickel: Moderation To Continue
35
Tin: Upside Ahead
36
Zinc: Consolidation Before Multi-Year Gains
38
Table: Select Commodities - Performance & BMI Forecasts
39
Competitive Landscape
41
Copper Producers To Stay On Top
41
Table: Chile - Financial Data For Domestically Listed Mining Firms
41
Company Profile
43
Antofagasta
43
Latest Results
45
Table: Antofagasta - Supply Chain Analysis
45
Table: Antofagasta - Financial Data
46
Codelco
47
Latest Results
49
Table: Codelco - Supply Chain Analysis
49
Table: Codelco - Financial Data
50
Anglo American
51
Company Strategy
54
Latest Results
55
Table: Anglo American - Financial Data
56
Regional Overview
57
Mexico & Peru To Remain Top Destinations
57
Canada To Lead North American Mining
59
Frontier Markets To See Little Development
61
62
Table: Estimated 2014 Production For Top Argentine Mines
63
Chinese Investment To Continue
63
Global Industry Overview
65
Capex Cutbacks To Yield Rewards
65
M&A Activity To Pick Up
66
High Grade Opportunities In Iron Ore
67
Shifting Centre Of Growth For Platinum
68
Chinese & Indian Outbound Mineral Investment To Gather Pace
69
Shake-Up For Global Rare Earths Industry
70
Methodology
72
Industry Forecast Methodology
72
Sources
73
Risk/Reward Rating Methodology
74
Table: Weighting Of Indicators
76

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.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc