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Chilean Mining Industry 2023: Year-end Report

As Chile continues to play a pivotal role in global mineral production, Punta El Monte provides a comprehensive overview of one of the world's most prominent mining hubs for the end of this year.


The new constitution's draft put to the vote on Sunday 17 December 2023 was rejected by 56% of voters in a high turnout of 84%. However, the current constitution has been legitimised by the people and politicians have promised not to try to replace it for some time.

The government has since pushed ahead with tax and pension reforms. President Boric has already included the importance of restoring growth in his government programme and has formed a committee of ministers to address this challenge. One of the first measures to be taken is to simplify the approval process for investment projects. Progress is likely to be made on this, given the broad consensus between the government and the opposition.

The Argentinean and Chilean authorities signed a memorandum of understanding to create a binational lithium working group to support the development of this industry in the shared salt flats.

Finally, the Senate Mining and Energy Commission continued to advance the Energy Transition Project, which promotes the development of energy transmission and storage facilities and would contribute to more environmentally friendly mining.

The Chilean Senate unanimously ratified the double taxation treaty with the United States after 13 years of negotiations. 

The US Congress had already ratified it in the middle of the year, so it can now enter into force. This will promote Chile as a business platform for foreign companies.


Economic activity grew by a seasonally adjusted 0.3% quarter-on-quarter, beating forecasts and leaving the possibility of a recession behind. A further quarterly GDP expansion is expected in the last quarter of the year, leading to a zero GDP change in 2023. A better performance is expected in 2024, when GDP is forecast to grow by 1.75%. 

Meanwhile, investment would close 2023 with a contraction of 1.9% and remain flat in 2024.  Reducing inflation has been the central bank's main concern throughout the year, and it has made significant progress. In November, the price change was 4.8% YoY and is expected to be on target at 3.0% by the second quarter of 2024. 

This will allow the monetary authority to continue its process of reducing the monetary policy rate, which stands at 8.25% and is expected to be cut by a further 75 basis points at the end of January.

It is projected to be around 5.00% by the end of 2024 and to reach its neutral level of 4.00% by the second quarter of 2025. 

The current account deficit is projected to be 3.3% in 2023 and 4% in the following two years. Since the third quarter, the current account deficit has continued to narrow, reaching 3.5% of GDP in the last rolling year. This is in line with the gradual recovery of national savings - with a notable increase in the private component - whose rebalancing will continue to contribute to the savings-investment balance. 

Finally, the projections for the budget deficit remain unchanged at 2.7% of GDP in 2023 and 2.5% in 2024. Public spending will increase by 2.2% and 3.5% and the public debt will be 40% and 41.6% respectively. 


Copper production grew by 1.9% year-on-year in the August-October quarter and is expected to expand by 1% in 2023, rising sharply to 5.0% in 2024 due to higher production levels at Escondida and the ramp up of Quebrada Blanca 2. 

The recovery in employment over the past three months has been faster in the mining sector than in the aggregate. Since last July, employment in the sector has risen by 1.1 %, compared with only 0.3 % for the aggregate. 

Labour costs in the Chilean economy have fallen by 9.2% in USD terms for the mining sector and 11% for the economy as a whole since July. One of the main reasons is the 13.9% depreciation of the CLP. 

Copper exports increased by 7.3% QoQ in the September-November quarter, driven by a 14.7% QoQ increase in copper concentrates and a 2.6% QoQ increase in copper cathodes. However, imports of mining machinery and equipment fell by 34% QoQ in the same period. 

Mining infrastructure investment for the period 2023-2027 amounts to USD 20,445 million, 1% higher than in the previous quarter. 

Meanwhile, investment in 2024 would be USD 3,789 million, down from USD 4,452 million in 2023. Among the factors explaining this slowdown are the completion of work at Quebrada Blanca 2 and the expansion of Pelambres 1. And among the projects that mitigate this effect is the USD 4.4 billion investment in Centinela. 


The average monthly copper price at the end of the year is around cUSD 379, up 0.9% since the end of September 2023. The energy transition is supporting the price of the metal, despite the slowdown in economic activity, particularly in China. The COP28 agreements, with their commitment to phase out fossil fuels, could boost the metal price in the coming years. 

The market expects copper supply to increase by 3.8% in 2023 and 4.6% in 2024 due to the commissioning of several projects. On the other hand, demand will increase by 2.0% and 2.7% over the same period. In both cases, it will be dominated by the dynamism of the Chinese market, which will grow by 4.3% in 2023 and 3.6% in 2024. 

However, cash costs continue to rise in Chile, from cUSD 159.1 in H1 2022 to cUSD 198.8 in H1 2023. The largest increases were in other expenses & services (cUSD 38.6) and payroll (cUSD 9.7). 


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