Sunday, 23 February 2020
Chile Mining: Insights into one of the Top Countries for Australian METS

Chile Mining: Insights into one of the Top Countries for Australian METS

  • Largest producer of fine copper in the world, with over 1/3 of global production
  • Over 100 million tonnes of fine copper is estimated in reserves in Chile, representing 30% of global reserves
  • Currently contribute more than 50% of the world’s lithium
  • US$104 billion investment pipeline for mining projects by 2021

South America is a very popular destination for Australian miners and METS, with Chile currently boasting the highest number of companies present. Around 30 Australian junior miners have an operation or project over there, and approximately 60 Australian METS already export their equipment, technology and services to the country.

Despite Chile being rich in copper and lithium, it does not come without its challenges. A major one lies in the market domination by a few companies. 90% of production is owned by just 10 companies, with 30% coming from Codelco. Naturally, if you can break into one of these companies, enormous opportunities exist, but doing that first deal can be difficult. Chile also faces inconsistent and also declining ore grades, and some of their open pit operations are now quite dated. Water (as in many mining locations) is a scarcity and therefore energy costs are at a premium. As with many first world countries, operational costs continue to escalate and there is a high push for sustainable mining operations by local communities and government bodies across most Latin American countries.

However, these challenges for miners provide increasing opportunities for Australian METS. With the high energy costs and water scarcity comes the need for energy efficient solutions, water treatment and recycling or desalination plants. The increasing operational costs have had the same effect on Chilean miners as here in Australia, meaning the need to improve productivity is critical. Automation, process control, smart mining technologies, training and processing equipment upgrades are all required. Also, with the push for sustainability has come a tightening of regulations and scrutiny around mine closure. Tailings management and environmental monitoring solutions are also therefore a focus for Chilean miners. Australia remains the toughest mining nation when it comes to environmental legislation, positioning Australian METS as world experts in the area.

Shannon Powell, Senior Trade Commissioner, Andean LATAM at Austrade commented: “Australian METS are consistently seen as the global leaders in Chile - on price, technology and productivity. Despite the tough conditions, we are well positioned to continue to grow our market share using our competitive advantages. We strongly encourage METS companies to join the Austmine mission to increase their knowledge about the market and opportunities for entry or expansion.” 

Chile’s largest mining exhibition and congress, EXPOMIN, takes place on 25 – 29 April 2016 in Santiago. The following week, Austmine plans to lead a trade mission to key mining operations including Escondida, Chuquicamata, Los Bronces in Chile, to meet with senior executives in companies such as BHP Billiton, Rio Tinto, Codelco and Anglo American in order to address their supplier needs and wants. Further details on this mission will be available shortly, but to register your interest in receiving more information, please email Robert Trzebski on Robert.trzebski@austmine.com.au

Sources used in this article:

KPMG Mining Country Guide – Chile: https://www.kpmg.com/Ca/en/industry/Mining/Documents/KPMG-Mining-country-guide-Chile.pdf

Austrade Latin America Downunder 2015 Presentation – available for download below.

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