Chile - Country Commercial Guide
Mining

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-01-16

Overview

Chile is the number one producer of copper and the number two producer of Lithium in the world. In 2019, the sector produced 5.79 million tons of copper and 112.6 thousand tons of lithium. Its current world copper and lithium production market share is 28 percent and 23 percent respectively. The mining sector’s contribution to the country’s GDP is approximately 10 percent (GDP 2019: $283 billion) and represents over half of the country’s total exports. It is a key sector of Chile’s economy.

Chile’s copper mining project pipeline remains attractive but both reductions in prices and ore grades place high demands on process efficiency. Also, operational costs need to include the cost of adopting technologies necessary to produce what has been termed “green copper “, i.e., copper produced in which the environment and the local communities are an integral part of the project.

The following table portrays the sector by looking at a sample set harmonized codes of mining equipment.

 

2016

2017

2018

2019

2020 estimated

2021 estimated

Total Local Production

256

258

322

202

194

232

Total Exports

203

222

155

163

160

190

Total Imports

1,156

1,292

1,612

1,701

1,656

1,747

Imports from the US

264

307

363

331

335

326

Total Market Size

1,209

1,328

1,779

1,740

                 1,690

                1,937

Exchange Rate: 1 USD

667

637

682

770

n/a

n/a

total market size = (total local production + imports) - exports

Units: $ millions

Source: Chilean customs data

For 2020, copper prices are expected to lie within the range of $2.50 - $3.00 per pound.  For the year 2021, mining sector investment projections will be around $5 billion.

Chile currently holds 51 percent of the world’s lithium reserves.  This combined with the demand coming from the electric vehicle industry will make this resource the focus of international investors and developers. Currently there are two large companies active in the industry: Soquimich S.A. (SQM) in association with Tianqui who owns 24 percent of SQM, and Albemarle Chile Ltda.  Chile is also the number one producer of iodine, rhenium and sodium and potassium nitrate.

The U.S remains the single largest mining parts and equipment supplier, with a market share around 30 percent. Important export opportunities in this industry will continue for those companies offering technologies and products that bring substantial operational cost reductions, improved productivity and more efficient use of water and cleaner and safer processes.

Freeport McMoran Copper & Gold Inc. of Phoenix, Arizona, and Albemarle Corporation of Charlotte, North Carolina are two major U.S. mining companies present in the market. Most mining companies continue to be Canadian, Australian, European, and Asian owned.

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
  • Tailing pond technology and services

Other

    • Underground mining technology equipment and services
    • Wear-resistant materials
    • PSE

Opportunities

Industry projections indicate that by 2026 the sector is expected to invest $19 billion, and U.S. exporters will remain an important supplier of quality products to Chilean importers.

Chile is seeking innovative technologies to modernize productivity and extraction in its mines, a trend that has been accelerated by the COVID-19 pandemic. A roadmap developed by Chile’s Mining Council, Fundación Chile, and Corporación Alta Ley outlines a 15-year plan to guide mining operators on deploying new technologies to handle operational challenges including improving sustainability and human resource management. Codelco, Chile’s state-owned copper mining company and largest copper producer in the world, has developed a digitalization strategy focused on data transmission and security, internet of things (IoT), automation, and integrated operations centers. Antofagasta Minerals has been experimenting with machine learning to gain efficiencies at its processing plants. Both Chilean mining firms have opened remote operation centers to centralize mining operations. Due to the risk averse culture of the sector, it is recommended that new technologies are introduced through cooperation with piloting centers to demonstrate effectiveness and reliability.

In Chile, there are two mining trade shows, EXPOMIN and EXPONOR:

EXPOMIN is the world’s largest mining trade show outside of the U.S. Its global attendance gathered over 1,350 exhibitors in 2018. The official U.S. Pavilion featured around 100 exhibitors. Expomin’s next version is scheduled to take place in Santiago on April 19-23, 2021.

EXPONOR is Chile’s second largest mining trade show after EXPOMIN. The show will take place in June 21-24, 2021, in the northern city of Antofagasta. The U.S. Pavilion features about 70 exhibitors.

In the past, both trade shows have received certification from the U.S. Department of Commerce.

Web Resources

For additional information, contact Mr. Marcelo Orellana marcelo.orellana@trade.gov