II International Investment Forum:72 mining projects for US$ 373 million were announced by InvestChile ProgramPublished: December 18, 2008
This event brought together 40 companies from Australia, Germany, Canada, the United States, China, Brazil and Spain, who held around 250 business meetings with their national counterparts.
CORFO - the Chilean Government's Economic Development Agency - announced 72 mining projects at different stages of development, with resources of over US$ 373 million and the generation of 3,108 jobs. This forms part of the current investment portfolio, associated with its Transversal Program for the Promotion and Attraction of Investment from Mining Suppliers, within the framework of the mining cluster. Of these, 13 initiatives are currently underway, with an investment of over US$ 66 million and 788 new jobs. Foreign capital accounts for 58% of this.
The balance was presented at the Second International Investment Forum for Mining Suppliers, which took place last December in Santiago and in the Arica y Parinacota, Tarapacá, Antofagasta and Atacama regions. The aim was to provide a space for business exchange, and at the same time, promote Chile as a business platform and point of access to other mining countries in Latin America. The event brought together 40 companies from Australia, Germany, Canada, the United States, China, Brazil and Spain. It also included more than 80 local companies from the regions mentioned, and also the O'Higgins, Bío Bío and Metropolitan regions. Around 250 bilateral business meetings took place.
The Minister for Mining, Santiago González; CORFO's Deputy Executive Vice- President, Jaime Arellano; the chief of research for the National Mining Society (Sonami), Álvaro Merino; the director of the Centre for Copper and Mining Studies (Cesco), Juan Carlos Guajardo; and the manager for Planning and Control of the El Teniente Division (Codelco), Germán Sandoval, attended the event, together with other public and private authorities.
"Investment of over US$ 60 billion is projected for Latin America; two thirds of which will be provided by Chile and Brazil. Furthermore, it is estimated that mining companies require US$ 2 billion for equipment and supplies nationally. Another US$ 3 billion is required for the contracting of services for the industry. Given the complex global economic climate, goods and services expenses of these companies will increase around 15% annually. According to projections, this means that the demand for supplies and services in the country will triple over the next three years, and we must be able to take advantage of this", explains CORFO's Executive Vice President, Jaime Arellano.
Among the international participants were: Hipertrans (Spain), dedicated to the repair of cranes and transport equipment; PPI (USA), who deal with components for industrial material transportation; Terra Remote (Canada), who offer remote airborne surveying.
Also worth noting within the CORFO portfolio is the Swedish company, Sándvik, which assembles equipment and supplies for the mining industry. In its first two years, it has a materialised investment of US$ 30 million and has created 158 new posts. Also of note, is the North American company, Jigsaw, in charge of the development of computer applications for the different types of mining industry client. It has a materialised investment of US$ 3.2 million and has created 37 new posts.
In addition, there are more than 40 companies active in Chile with projects for exploration and exploitation of metallic minerals, such as copper, gold, zinc and silver, and non-metallic minerals. Among the most important investments are: Barrick Gold, with Pascua-Lama in the Atacama region; Noranda -Falconbridge with Collahuasi, in the Tarapacá region; Lumina Cooper with the Caserones Project, also in Atacama; Anglo American with Expansión Los Bronces, in Valparaíso; BHP Billiton with Escondida and Placer Dome with Zaldívar, both in the Antofagasta region.
"It's important that foreign investors know the potential of the country's main economic activity, which is mining, and the advantages that have enabled us to become leaders: the quality of geological resources, trained professionals, first class infrastructure, plus an institutional, political, economic and legal framework which is ideal for investment", explains the chief of research for the National Mining Society (Sonami), Álvaro Merino.
Chile as a platformThe country has important attributes which translate into a variety of business and development opportunities. It has 33% of total copper production, with 28% of the reserves worldwide. Likewise, it has 20% of the reserves of molybdenum, 15% of gold and 3% of silver deposits. In industrial minerals, Chile has 100% of nitrate reserves, 15% of iodine and 43% of lithium.
The investment niches being explored by foreign financiers are related with investment and innovation in new technologies and the development of strategic supplies, with a view to the next few years. In this sense, given its attributes as a producer and its proximity to other mining countries, there are lines of business in which Chile has great potential to become an export platform for goods and services. These include the development of new materials for the exploration and exploitation of deposits, particularly those used in drilling and core sampling, and in mining equipment for the movement of materials (shovels, chutes, conveyor belts, etc). Another niche can be found in mining equipment and the processing of minerals. Over the next decade, there will be a lot of replacement because the life-span of equipment acquired in the 90's will expire.
Furthermore, there are the engineering services, related with water, energy and environmental resources, and services related to Information and Communication Technologies (ICTs) and to automation. The increasing logistical challenges facing mining point to a major development of these technologies, including the administration of production process and management information, remote control of processes, radio frequency identification, photonic networks, robotics, connectivity and telecommunications.
Finally, deepening the trend of outsourcing services for mining, which is moving towards the concept of full service operation and maintenance, will increase the significance of this business niche. Services that may be outsourced are estimated to range from 40 to 60%, which translates into business to the order of 3 to 5 billion US dollars.
It is worth noting that CORFO, through its Transversal Investment Program in the sector, focuses its activities to strengthen and promote investment in niche businesses such as those mentioned above, with a view to strengthening the National Mining Cluster. They include looking for new participants, promoting technological upgrading of the platform for enterprises, and local capabilities. In particular, for the realization of investment, CORFO offers information services, management support, and facilitation in various stages of the project; economic incentives for investment; access to business networks and sources of funding; and finding partners for investment.