Industry Trend Analysis - Weak Growth Across The Board - NOV 2015


BMI View: Chile's mining industry will experience slow growth as weak prices and rising production costs force miners to suspend operations and halt new projects due to come online . Copper production will increase moderat e ly , albeit marginally , and gold, silver and iron ore will follow suit.

Chile's mining sector will rebound slowly from the commodity price slump, as rising production costs will drive small-scale miners to consolidate, divest high-cost assets and halt new projects. We expect the country's mining industry value to climb to USD29.4bn by 2019 from its 2015 value of USD28.6bn, while the industry will account for a declining portion of Chile's total GDP, falling from 12.4% in 2015 to 9.2% in 2019. Miners will benefit from a weak Chilean peso (projected to average CLP640/USD in 2016), which will reduce input costs priced in local currency while adding value to metals, which are priced in US dollars. Copper will continue to account for the lion's share of industry value, growing modestly from USD25.7bn in 2015 to USD26.5bn by 2019, supported by a few major projects coming online later than initially planned.

Copper Production To Plod Upward

Copper To Remain Dominant
Chile - Mining Industry Value Share Of Total (%)
f = BMI forecast. Source: USGS, BMI

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