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Chilean Mining Industry 2Q 2024

As #Chile maintains its pivotal role in global #mineral production, Punta El Monte offers an in-depth analysis of 2024's second quarter landscape, providing a comprehensive overview of one of the world's most prominent #mining hubs with its Chilean Mining #Industry #Report.


Tax Compliance Bill

The #TaxCompliance bill, which has the potential to generate 1.5% of GDP in revenue, has been passed to the reviewing chamber. The discussions between the #FinanceMinister and #senators on the #FinanceCommittee have been both intense and reserved, with a primary focus on the passage of the legislation. The most controversial aspects of the bill include the General Anti-Circumvention Rule (NGA), modifications to bank secrecy, the anonymous whistleblower and the governance of the Internal Revenue Service. The government is of the opinion that it is imperative to proceed with this bill due to the tight budgetary position.

Corporate Tax 

The Finance Minister has signaled a willingness to pursue a reduction in the #CorporateTax rate from the current 27% to 23%. This reduction forms part of the draft changes to the income #tax, which will be submitted to #Congress by September.

Fiscal Management

The project to modernize #fiscal management is now in its final stage. The bill complements the Structural Balance rule with a Government Gross Debt anchor and introduces an "Escape Clause" for temporary deviations from fiscal targets.

Investment Project Permits

The bill that aims to reduce the processing times for permits for #investment projects by 30% has been approved in the first instance and could be voted on in the Chamber of #Deputies in July. The proposal suggests replacing certain permits with affidavits for low-risk projects, establishing a #digital one-stop shop for permit applications and defining maximum deadlines for inter-sectoral reports, as well as regulating administrative silence. One of the more contentious aspects of the proposal is the establishment of the Sectoral Regulation and Evaluation Service, which has encountered resistance from some quarters.

Tailings Deposit Management

The #MiningCommission has submitted a bill to the Chamber of Deputies requiring the implementation of a heavy elements’ recovery plan for tailings deposit managers. The plan, to be reviewed every five years and updated every ten years, may result in increased investment costs in Chile.

Lithium Exploitation

The deadline for submitting request for information in the exploitation of #lithium projects in #Chile expired on 17 June, with 88 proposals received from 54 companies in 10 countries. The proposals will be evaluated and contracts will be awarded based on factors such as the technology used and the returns to the nation. Chile, with 36% of the world's lithium reserves, anticipates annual growth of 15.5% in global demand for the mineral, driven by the rise of #electromobility. Currently, #SQM and #Albemarle are the only companies with permits to exploit lithium in the country.

Copper Industry

The #CopperIndustry is monitoring the three-year collective bargaining process at #MineraEscondida, which accounts for 5% of global production. Should negotiations between the union and the company prove unsuccessful, there is a possibility of supply disruptions by the end of August.


There are indications that the local #economy is on the road to recovery. In line with this outlook, the #CentralBank has revised Chile's growth projections for 2024 upwards and maintained them at the current level for the following two years. The forecasted growth rate for 2024 has been revised upwards from 2.5% to 2.6%, while the outlook for 2025 and 2026 remains at 2%.

Investment has shown signs of stabilizing, with no change in the first quarter of 2024. The estimates are optimistic, anticipating significant growth in the coming years, with an increase of 5.4% in 2025 and 2.8% in 2026. This growth is largely attributed to the mining sector.

In terms of #inflation, the economy has resolved previous imbalances, with inflation declining and approaching the 3% target. It is anticipated that inflation will decline gradually, with a projected convergence towards the 3% target in the first half of 2026. The projected inflation rate for December 2024 is 4.2%, with a projected decline to 3.6% by December 2025.

The Monetary Policy Rate (MPR) has declined significantly over the past year and is expected to continue to decline, albeit at a slower rate. The current rate of 5.75% is forecasted to close the year at 5.25%, with an anticipated decline to 4.50% by the end of 2025.

It is projected that the exchange rate will close the year at approximately CLP 890 per USD. Despite the current misalignment with fundamentals, a gradual correction is anticipated in the second half of the year.

By 2024, the expected deficit is 1.9% of GDP. The central government gross debt is anticipated to reach approximately 40.6% of GDP by 2024, with a potential for stabilization below 41% of GDP by 2028.


The latest Mining Signals Survey, conducted by Vantaz Group and #Cesco, reveals that the Chilean mining sector is experiencing the highest levels of optimism since 2021. The survey found that the sector is expecting an index of 73 points over the next 24 months (1). The robust demand and rising prices for critical minerals are driving a positive outlook.

(1):   1 Mining (0 pessimistic - 100 optimistic).

This positive outlook is already reflected in production, which has been rising for several months. Indeed, there has been a 2.4% increase in copper production during the February to April 2024 quarter in comparison to the previous year.

At the #mine level, most mines are increasing their production, with the exception of those associated with #Codelco, which have encountered challenges as previously reported. By way of illustration, production at Escondida has increased by 8.5%, at #Collahuasi by 10.5% and at #LosPelambres by 33.7%. Furthermore, the production of #QuebradaBlanca, which was negligible last year, has already reached 58 kMT by April of this year.

The higher level of activity has resulted in a more dynamic growth in employment than the national average. In fact, the mining industry has seen a 2.7% increase compared to last January, while the national average has only reached 0.7%.

In contrast, wages in dollars demonstrate a comparable trajectory to the national average. There has been a 3.3% contraction between January and April.

Mining exports have shown a robust increase this quarter, with a 14.7% growth in the March-May period of 2024 compared to the same period last year, driven primarily by concentrates. Furthermore, there was a 21.3% increase in imports of mining machinery and equipment in the

March-May quarter compared to the previous year.


In the last quarter, the #copper price has shown a notable recovery, with an increase of 15.6% driven by enhanced expectations for the #ChineseEconomy and a gradual expansion in supply. However, in addition to the underlying economic fundamentals, there is also the potential for speculative position-taking to be reversed quickly.

Mine #CopperProduction is expected to contract from a 3.3% expansion to 2.8% by 2024 and from 5.0% to 4.5% by 2025. In contrast, projections for demand growth were revised upwards from 0.4% to 2.2% by 2024, although this figure is weaker than the previous estimate of 2.0% to 1.6% by 2025.

Furthermore, the cash cost of production increased by cUSD 25.3 per pound in 2023 compared to 2022. The greatest increases were observed in other expenses and services, at cUSD 27.5, followed by payroll, at cUSD 8.0, and TC/RC, at cUSD 4.3.


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