Our View: Chile’s mining sector will see modest average annual growth of 1.6% in 2015-2019. Mining
investment will be encouraged by the country’s stable political and business environments, combined with
its significant mineral reserves. Nevertheless, older mines will still face declining output, while subdued
copper and precious metal prices will limit sector growth and miners’ expansion plans.
Chile’s mining sector will be dominated by copper production over our forecast period to 2019. The sector’s
pipeline of copper projects and the country’s global dominance in copper production will ensure the country
maintains its lead despite falling ore grades and lagging productivity. In 2014, copper accounted for
approximately 92% of mining exports as measured in dollar terms and nearly 55% of the country’s total
exports. However, the latter represents a decline from 2010, when copper accounted for slightly over 58%
of the country’s total exports. Moreover, lower oil prices and a weaker Chilean peso on the back of US
dollar strength will cap growth in input costs, providing a boon to miners facing subdued metal prices.