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  4. > Chile Mining Report Q3 2016

Chile Mining Report Q3 2016

  • May 2016
  • -
  • Business Monitor International
  • -
  • 50 pages

Includes 3 FREE quarterly updates

BMI View: Chile's mining sector value will continue to contract through 2017, on the back of weak mineralprices and elevated operating costs. Nonetheless, country will remain the top global copper producer by awide margin over our forecast period to 2020.

Latest Updates & Structural Trends

- We forecast Chile's mining industry value to edge higher, increasing from USD26.7bn in 2016 toUSD27.9bn by 2020, averaging 0.2% annual growth. Miners in the country will come under increasingenvironmental scrutiny from the regulatory body, facing fines, project delays and operational disruptions.

- Chile, the largest copper producer, will experience relatively flat growth over 2016 to 2020, as weakcopper prices, weather-related operational disruptions and declining copper ore grades curb output. Weforecast Chile's annual copper production growth to average 1.1% over this period, increasing in volumefrom 5.7 million tonnes (mnt) in 2016 to 6.1mnt by 2020.

- Chile's gold sector will experience limited growth over our forecast period to 2020 due to persistently lowgold prices. We expect production to increase at an average y-o-y rate of 0.6% between 2016 and 2020,with output growing from 1.38 million ounces (moz) to 1.42moz.

- Elevated operating costs, notably water and power costs, will weigh on Chile's extractive sector, deterringinvestment particularly in light of lower costs in neighbouring Peru. While lower oil prices and a weakerChilean peso on the back of US dollar strength will cap growth in input costs, providing a boon to minersfacing subdued metal prices, the benefit will be outweighed by rising operating costs.

- Climbing rates of mining sector layoffs along with declining investment levels provide further evidenceof Chile's mining sector (largely copper) malaise. For instance, in Q116, mining sector layoffs totalled76.1 thousand people, compared to 66.7 thousand people in Q115. State copper commission Cochilcoestimates copper project investment of USD44.1mn 2016, down significantly from USD75.1mn theprevious year.

Table Of Contents

Chile Mining Report Q3 2016
BMI Industry View 7
Table: Chile Mining Industry Value Forecast (2014-2020) 7
Latest Updates and Structural Trends 7
SWOT 8
Industry Forecast 10
Copper: Slight Contraction In 2016 10
Table: Copper Production Forecast (Chile 2014-2020) 10
Table: Chile - Key Copper Projects and Expansions 11
Structural Trends 11
Gold: Rising Environmental Concerns To Target Gold Mines 14
Table: Gold Production (Chile 2014-2020) 15
Table: Chile - Key Gold Projects 15
Industry Risk Reward Ratings 18
Industry Risk/Reward Index - Chile - Q3 2016 18
Rewards 18
Industry Rewards 18
Country Rewards 18
Risks 18
Industry Risks 18
Country Risks 19
Americas: Risk/Reward Index 19
Key Takeaways 19
Latest Revisions 20
Table: Americas - Mining Risk/Reward Index 21
Regulatory Development 22
Commodities Forecast 26
Commodities Outlook 26
Table: BMI Commodities Price Forecasts 26
Competitive Landscape 27
Sectors 27
Table: Chile - Largest Listed Companies Financial Data, 2015 28
Company Profile 29
Antofagasta - Q3 2016 29
Table: Antofagasta - Key Financial Data 31
Codelco - Q3 2016 32
Table: Codelco - Key Financial Data 34
Global Company Strategy - Anglo American - Q3 2016 35
Table: Select Commodities - Price Forecasts 36
Latest Results 38
Company Strategy 39
Table: Anglo American - Financial Data 41
Regional Overview 42
Methodology 47
Industry Forecast Methodology 47
Sources 48
Risk/Reward Index Methodology 49
Table: Weighting Of Indicators 50

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