Diapositiva 1 - Comisión Chilena del Cobre
Diapositiva 1 - Comisión Chilena del Cobre
Diapositiva 1 - Comisión Chilena del Cobre
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LatAm MINING<br />
Congress 2010<br />
April 30<br />
Coral Gables<br />
Chile’s Outlook<br />
in Copper<br />
Ana Isabel Zuñiga<br />
Research and Policy Planning Director
CONTENTS<br />
Chile’s Leadership in the Copper<br />
Industry<br />
Legal Framework and Institutional<br />
Arrangements<br />
Portfolio of Mining Projects and<br />
Production Forecast<br />
Main Challenges and Public Policy<br />
Priorities
Chile in Numbers<br />
• GDP 2009<br />
– US$170 Billions<br />
– $ 15.010 P/C (PPP)<br />
• Population:<br />
– 17,031,873 (estimate 2010)<br />
• Area:<br />
– 756,950 km 2<br />
292,183 sq mi<br />
Sources: Cental Bank of Chile, INE, The World Bank Group, The Economist.
Integrated to global community<br />
and an Open Economy<br />
• Member of:<br />
– ONU, OEA, ALADI, OLADE, OEI, Grupo de Río, CIN, Unasur;<br />
BID, OMC, APEC, P4, OCDE; CAF, CAN, Mercosur; G77,<br />
INTERPOL, OMS, ICSG<br />
• OCDE partner since January 2010<br />
• Free trade and commercial agreements:<br />
– One of the countries with more FTA’s<br />
– 56 countries to date<br />
•U.S.A.<br />
•European Union<br />
•Canada<br />
•South Korea<br />
•New Zeeland<br />
•Japan<br />
•Singapore<br />
•Brunei<br />
•China<br />
•Australia<br />
•Mexico<br />
•Central and Latin<br />
American<br />
Countries<br />
•EFTA<br />
•India<br />
•Malaysia, Turkey,<br />
Vietnam and<br />
Thailand in<br />
process<br />
Sources: Cental Bank of Chile, INE, The World Bank Group.
Going Beyond Income<br />
• HDI 2009 = 0.878 (1 st in LA)<br />
• 49 th Doing Business Ranking (1st in LA)<br />
• 34 th Cost of Electricity Ranking (2nd in LA)<br />
• 23 rd Corruption perception (1st in LA)<br />
• 40 th in PISA educational Ranking (1st in LA)<br />
Sources 2009-2010: The World Bank, OECD, ProChile.
Ecuador<br />
Venezuela<br />
China<br />
Peru<br />
Australia<br />
Chile<br />
Attractive Geological<br />
Potential<br />
World Copper Reserve Base<br />
Mexico; 4% ROW, 17%<br />
USA; 7%<br />
Australia,<br />
5%<br />
Geological potential survey<br />
results 2009<br />
56%<br />
83% 85% 93%<br />
Indonesia;<br />
4%<br />
Canada;<br />
2%<br />
Zambia; 4%<br />
Polonia; 5%<br />
Chile; 38%<br />
362 MMT<br />
30% 31%<br />
Peru; 6%<br />
China; 7%<br />
Sources: USGS 2010 , Fraser Institute.
Source: COCHILCO<br />
Investments in Mining<br />
4,500.0<br />
4,000.0<br />
(Millions of Dollars)<br />
3,500.0<br />
3,000.0<br />
2,500.0<br />
2,000.0<br />
1,500.0<br />
1,000.0<br />
500.0<br />
0.0<br />
Pivate<br />
State
1975<br />
1977<br />
1979<br />
1981<br />
1983<br />
1985<br />
1987<br />
1989<br />
1991<br />
1993<br />
1995<br />
1997<br />
1999<br />
2001<br />
2003<br />
2005<br />
2007<br />
2009<br />
Copper Production and<br />
Market Share<br />
18,000.0<br />
16,000.0<br />
14,000.0<br />
12,000.0<br />
10,000.0<br />
8,000.0<br />
6,000.0<br />
4,000.0<br />
2,000.0<br />
0.0<br />
(kMT)<br />
ROW<br />
Chile<br />
45%<br />
40%<br />
35%<br />
30%<br />
25%<br />
20%<br />
15%<br />
10%<br />
5%<br />
0%<br />
Source: World Metal Statistics, USGS, COCHILCO
World Class Copper<br />
Mines in Chile<br />
Escondida<br />
Co<strong>del</strong>co Norte (Chuqui)<br />
PT Freeport Indonesia<br />
Collahuasi<br />
El Teniente<br />
Norilsk<br />
Los Pelambres<br />
Cerro Verde<br />
Antamina<br />
Bingham Canyon<br />
Rudna<br />
Los Bronces<br />
Morenci<br />
Andina<br />
Sarcheshmeh<br />
Batu Hijau<br />
Cuajone<br />
Dzhezkazgan<br />
Mount Isa Cu<br />
Spence<br />
Sources: Brook Hunt.<br />
0% 1% 2% 3% 4% 5% 6% 7% 8%
Millions US$<br />
GDP of Mining Industry<br />
(Share of Country GDP)<br />
40,000<br />
35,000<br />
30,000<br />
25.00%<br />
20.00%<br />
25,000<br />
20,000<br />
15,000<br />
10,000<br />
5,000<br />
-<br />
15.00%<br />
10.00%<br />
5.00%<br />
0.00%<br />
Source: Central Bank of Chile, Cochilco.
Millions US$<br />
Source: COCHILCO<br />
Mining Exports<br />
50,000<br />
45,000<br />
40,000<br />
35,000<br />
30,000<br />
25,000<br />
20,000<br />
15,000<br />
10,000<br />
5,000<br />
0<br />
70%<br />
60%<br />
50%<br />
40%<br />
30%<br />
20%<br />
10%<br />
0%<br />
Copper Rest of Mining Share of Total exports
Mining Contribution<br />
16,000<br />
14,000<br />
to the Treasury<br />
a<br />
(Millions of Dollars)<br />
40%<br />
12,000<br />
30%<br />
10,000<br />
8,000<br />
20%<br />
6,000<br />
4,000<br />
10%<br />
2,000<br />
-<br />
0%<br />
Coldeco's Contribution BMC-10 Contribution Mining Share<br />
Source: DIPRES and COCHILCO.
CONTENTS<br />
Chile’s Leadership in the Copper<br />
Industry<br />
Legal Framework and Institutional<br />
Arrangements<br />
Portfolio of Mining Projects and<br />
Production Forecast<br />
Main Challenges and Public Policy<br />
Priorities
Legal framework<br />
• Political Constitution (1980) and<br />
Organic Law (1982)<br />
– The State is the only owner of all mineral resources, but<br />
concessions can be established by all persons.<br />
– Concessions are given by a resolution from the Court.<br />
– The concession is protected by the Constitution as a<br />
property right.<br />
– Exploration concession last 2 years (can be extended<br />
for another 2 years). Concessions for exploitation are<br />
indefinite.<br />
– Compensation in case of expropriation=NPV of<br />
verified reserves<br />
Sources: COCHILCO
Foreign Investment in Chile<br />
• Basic Principles:<br />
– National Treatment<br />
– Stable Rules<br />
– Guaranteed Property Rights<br />
• Decree Law 600(1974): The<br />
Foreign Investment Statute<br />
– Rules a Contract with the State.<br />
– Tax invariability regime.
Taxation<br />
• First Category Tax, a business profit tax, 17% since<br />
2004.<br />
• Global Complementary Tax, personal tax on total<br />
income, between 5% and 40%.<br />
• Additional Tax, Tax on persons not resident in Chile,<br />
35% or 42%.<br />
• Specific tax on mining activities (since 2005):<br />
– This tax is levied on operational income derived from<br />
mining activity obtained by a mining exploiter.<br />
– Mining exploiters whose annual sales exceed the<br />
equivalent of the value of 50,000 metric tons of fine<br />
copper pay a single 5% tax rate. In other cases it<br />
ranges between 0% and 4,5%.<br />
Sources: SII
The Chilean Mining<br />
Public Sector<br />
Central<br />
Government<br />
CODELCO’S New<br />
Corporate<br />
Governance Law<br />
(Nov 2009)<br />
Ministry<br />
Companies<br />
Ministry of<br />
Mining<br />
Ministry<br />
Agencies<br />
CODELCO ENAMI ENAP<br />
COCHILCO<br />
SERNAGEOMIN
CONTENTS<br />
Chile’s Leadership in the Copper<br />
Industry<br />
Legal Framework and Institutional<br />
Arrangements<br />
Portfolio of Mining Projects and<br />
Production Forecast<br />
Main Challenges and Public Policy<br />
Priorities
Investments in Copper and Gold<br />
Mining in Chile (2009-2015)<br />
$ 8,000<br />
$ 7,000<br />
$ 6,000<br />
$ 5,000<br />
$ 4,000<br />
$ 3,000<br />
$ 2,000<br />
$ 1,000<br />
Millions of Dollars<br />
US$ 43.2 billion<br />
$ 0<br />
< 2009 2009 2010 2011 2012 2013 2014 2015 > 2015<br />
Rest of Mining Industrie<br />
Co<strong>del</strong>co<br />
Source: “Inversión en la Minería <strong>Chilena</strong> <strong>del</strong> <strong>Cobre</strong> y <strong>del</strong> Oro” (COCHILCO).
Source: COCHILCO “Inversión en la Minería <strong>del</strong> <strong>Cobre</strong> y <strong>del</strong> Oro Proyección 2009– 2015”<br />
Main Projects<br />
CODELCO NORTE<br />
R. TOMIC SULFUROS<br />
Start up: 2010<br />
80 Ktonyear Cu from Concentrates<br />
MINA MINISTRO A. HALES<br />
Star-Up: 2014<br />
165-200 Kton/year Cu from<br />
Concentrates<br />
ANTOFAGASTA MINERALS<br />
ESPERANZA<br />
Start up: ends of 2010<br />
195 Kton/year Cu<br />
ANTOFAGASTA MINERALS<br />
EXTENSIÓN LOS PELAMBRES<br />
Start up: : 2011<br />
80 Kton/year Cu<br />
ANGLO AMERICAN CHILE<br />
EXPANSIÓN LOS BRONCES<br />
Start up: 2011<br />
+170 Kton/year Cu<br />
BHP BILLITON<br />
ESCONDIDA FASE V<br />
Start up: 2015<br />
+ 210 Kton/yearCu<br />
COLLAHUASI<br />
Expansión Fase I<br />
Start up: 2010<br />
+ 200 Kton/year Cu<br />
XSTRATA<br />
EXTENSIÓN LOMAS BAYAS<br />
Start up:<br />
Lomas Bayas I: 2008<br />
Lomas Bayas II: 2011<br />
+ 75 Kton/year Sx Ew Cathodes<br />
PAN PACIFIC COPPER<br />
CASERONES<br />
Start up: 2013<br />
120 Kton/año from Concentrates<br />
30 kton/year Sx Ew cathodes<br />
CODELCO DIVISION ANDINA<br />
ANDINA FASE II<br />
Start up: 2015<br />
Hasta 350 Kton/year Cu<br />
XSTRATA<br />
EL MORRO<br />
Start up: 2014<br />
195 Kton/year Cu
KTM<br />
KTM<br />
8000<br />
Copper Mine Production<br />
Forecast 2010-2020<br />
7.5 mill ton<br />
Share of New<br />
Projects<br />
40%<br />
7000<br />
6000<br />
5.4 mill ton<br />
New Projects<br />
35%<br />
30%<br />
5000<br />
25%<br />
4000<br />
20%<br />
3000<br />
15%<br />
2000<br />
1000<br />
Base<br />
Production<br />
10%<br />
5%<br />
0<br />
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020<br />
0%<br />
Source: COCHILCO
Chilean Projects:<br />
Useful Experience for Others<br />
Esperanza<br />
(Antofagasta Minerals)<br />
Technical innovations:<br />
Thickened Tailings<br />
Ore processing with Sea Water<br />
Desalination Plant (for human<br />
consumption)<br />
Sulfolix El Abra<br />
Freeport McMoran / Co<strong>del</strong>co)<br />
Technological change from<br />
conventional Lix/Sx/Ew process to<br />
Sulfide Leaching Process<br />
Collahuasi Expansion<br />
Project(Anglo American<br />
/Xstrata Copper)<br />
Brownfield project<br />
Huge potential to increase<br />
production, supported by one of the<br />
largest and richest copper deposits<br />
of the world<br />
Andina Expansion<br />
Phase II<br />
Project (CODELCO)<br />
Technical challenges: localization,<br />
environmental conditions,<br />
exploitation design, etc.)
CONTENTS<br />
Chile’s Leadership in the Copper<br />
Industry<br />
Legal Framework and Institutional<br />
Arrangements<br />
Portfolio of Mining Projects and<br />
Production Forecast<br />
Main Challenges and Public Policy<br />
Priorities
Increase Exploration…<br />
8%<br />
Share of Chile in total exploration expenditures<br />
6%<br />
4%<br />
2%<br />
0%<br />
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009<br />
Chile<br />
World Total<br />
Exploration<br />
Stages<br />
Close to<br />
the mine<br />
52%<br />
Basic<br />
30%<br />
Advance<br />
18%<br />
Close to<br />
the mine<br />
27%<br />
Advance<br />
41%<br />
Basic<br />
32%<br />
Types of<br />
Companies<br />
Source: MEG<br />
Others 3%<br />
Gob 2%<br />
Medium 7%<br />
Junior<br />
14%<br />
Major<br />
74%<br />
Others 1%<br />
Gob 3%<br />
Medium 13%<br />
Major<br />
44%<br />
Junior<br />
38%
N° of direct employees<br />
Share of Production (%)<br />
Develop Medium-Scale<br />
Mining…<br />
Copper Mining in Chile (By Production Segment)<br />
40000<br />
35000<br />
30000<br />
25000<br />
20000<br />
15000<br />
10000<br />
5000<br />
0<br />
Direct Employment (N°) Share of Production (%)<br />
Small (N°=2050) Medium<br />
(N°=29)<br />
Big<br />
(N°=16)<br />
100%<br />
90%<br />
80%<br />
70%<br />
60%<br />
50%<br />
40%<br />
30%<br />
20%<br />
10%<br />
0%<br />
Source: SERNAGEOMIN
Address “divorce” between Mining<br />
and Capital Market…<br />
Ahorro en Chile: US$ 300,000 millones<br />
IPSA según Sector Productivo<br />
36.000<br />
12%<br />
30.000<br />
10%<br />
30.000<br />
10%<br />
14.000<br />
5%<br />
80.000<br />
27%<br />
110.000<br />
36%<br />
AFP<br />
Depósitos<br />
Seguros<br />
Fondos Mutuos<br />
Banca Privada<br />
Otros<br />
Bancos<br />
15%<br />
Minería /<br />
Acero<br />
8%<br />
Holdings<br />
13%<br />
Forestales<br />
17%<br />
Energía<br />
20%<br />
Comercio<br />
15%<br />
Telecom<br />
2%<br />
Sanitarias<br />
2%<br />
Transport<br />
e<br />
4%<br />
Bebidas<br />
4%
Expand our scope for mineral<br />
exploitation…<br />
Main products<br />
Metal Mining<br />
2009<br />
Production<br />
World<br />
Ranking<br />
Market<br />
Share<br />
Share in global<br />
total reserves<br />
Copper (MT) 5,389.60 1° 34.0% 29,1%<br />
Molybdenum (MT) 34.9 3° 15.6% 12,8%<br />
Rhenium (MT 2008) 27,6 1° 48,4% 52%<br />
Silver(MT) 1,301 5° 6.2% N.D.<br />
Gold (MT) 40.83 15° 1.7% 4,3%<br />
Industrial Minerals<br />
Natural Nitrates (MT) 1,048,706 1° 100.0% 100%<br />
Lithium Carbonate (MT) 25,154 1° 53.0% 27%<br />
Iodine (MT) 17,399 1° 61,6% 60%<br />
Source: own calculations based on data from COCHILCO & BrookHunt
Millions of US$ 2003<br />
Thousand of Employees<br />
Strengthen Mining Cluster…<br />
12,000<br />
10,000<br />
8,000<br />
Others<br />
Retail and Food<br />
Transport and<br />
Communication<br />
350<br />
300<br />
250<br />
Others<br />
Transport and<br />
Communication<br />
Social services<br />
6,000<br />
Electricity<br />
200<br />
Industrial<br />
4,000<br />
2,000<br />
Construction<br />
Industrial<br />
Financial Services<br />
150<br />
100<br />
50<br />
Retail and Food<br />
Financial Services<br />
and Others<br />
Construction<br />
0<br />
Product<br />
Mining<br />
0<br />
Employment<br />
Important multiplier effect<br />
1:1 1:6<br />
Mining<br />
Source: COCHILCO and Central Bank of Chile.
Foster INNOVATION to address<br />
industry challenges…<br />
• Geological<br />
conditions:<br />
– Lower grade<br />
– Depth of deposits<br />
• Environmental<br />
Conditions:<br />
– Energy<br />
management<br />
– Water Management<br />
– Closing of sites<br />
• Human capital<br />
• Cluster<br />
Innovation<br />
and<br />
Economy of<br />
Knowledge<br />
Mining<br />
Specific<br />
TAX<br />
Sustainable<br />
development<br />
based on Mining
Why is Chile attractive<br />
for Mining Investment?<br />
• Favorable geologic potential<br />
• Social, political and legal stability<br />
• Good infrastructure<br />
• Qualified personnel<br />
• Adequate technological level<br />
• Mo<strong>del</strong> has proved to be successful<br />
• Future challenges are properly identified<br />
and appropriate policies are underway.
Chile’s Outlook in Copper<br />
Thank You!<br />
LatAm MINING<br />
Congress 2010<br />
April 30<br />
Coral Gables<br />
Ana Isabel Zuñiga<br />
Research and Policy Planning Director
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