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Santiago, Chile (UPI) Jan 17, 2013
Investment in Chile's mining sector is set to exceed $100 billion over the next 12 years and about half will go into boosting copper production, mainstay of the Latin American country's economy, the national mining industry body said.
Investor interest in Chilean mining is driven by the rising prices of metals and minerals and projections that demand for copper and other metals will rise over the next decade and drive prices upward.
Critics warn that the government of President Sebastian Pinera needs to heed protests by indigenous groups, centered on environmental concerns, sharing of profits from mining and other issues.
Chile produces and exports aluminum, gold, molybdenum, lithium and silver in addition to its copper output, the world's largest. China, the fourth largest producer after the United States and Peru, is also Chile's major customer as its economic boom continues.
Chile's National Mining Society Sonami, an association of mining companies, says at least half of the projected new investment may go into boosting copper production.
Both the mineral industry and Chilean government officials cite data about investment continuing to pour into new projects but details of who is likely to invest where in the vast sector remain largely unclear.
Sonami says $48 billion may be invested mostly in copper in the next eight years.
Investors are drawn by high growth forecasts for the Chilean mining sector. This year's growth outlook suggests significant gains both in output and in prices.
Sonami manager and spokesman Alberto Salas said the future prices of copper could range between $3.67 and $3.8 per pound which, he said, would be consistent with current prices averaging at $3.6 per pound.
In trade terms that projection means that Chile this year could export copper for the value of $55 billion, Sonami says.
The Chilean treasury earns both from exports and from taxes on copper production.
"As the year advances the price of copper will tend to increase, Salas said, MercoPress reported. Nevertheless, he said, Chile must also be prepared for any downturn resulting from slow growth in the United States and Europe and China's economic performance.
Environmentalist groups are supporting indigenous Chilean communities' demands for more responsible and sustainable mining or no mining at all in areas marked by indigenous communities as historically sacred or critical to their lifestyles.
Chile is also seeking to boost its oil and gas production and reduce its energy bill both for domestic consumption and industrial use.
Global Trade News
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