Mining in Chile

Australia Unlimited Latam is a major supplier of metals worldwide Commodit y ChilePerúBrasilMexico Copper1243 Silver3241 Gold4132 Chile accounts for: 33 % of world Copper Production, and +30%of world copper reserves. #1 world producer of molybdenus, Lodine, Lithium, and natural nitrates; 15% of gold and 3% of silver.

Australia Unlimited Chilean Market Chile is the best evaluated economy in Latin America and, indeed, one of the best evaluated among emerging economies worldwide Favorable investing environment: According to the Business Environment Rankings of the Economist Intelligence Unit (EIU), Chile is one of the 20 most attractive economies in which to do business between 2010 and 2014 and leads Latin America in this field. Santiago had the 8th cheapest rents out of the main 15 Latin American capitals (average US$36.41 per year per square foot) The Chilean business/commercial positive background is built and strengthen by a transparent and protective legal framework; stable economic fundamentals; safe and pleasant living conditions; low costs of opening business starting a business. Australian companies have found Chile to have positive conditions for employing workers, enforcing contracts, getting credit, closing a business, registering property, protecting investors, dealing with licenses, paying taxes and trading across borders

Australia Unlimited Chilean Mining Industry Mining activity accounts for 60 % of 2011’s exports and 12 % of the GDP Chile contributes with 33 % of world copper production, and +30% of world’s copper reserves. Major producer of Lithium, Iodine and Rhenium, gold, silver and molybdenum. Mostly hard rock mining and open cut operations, but operations are moving strong into underground mining Highly competitive market, World's best technologies and companies are here. Strong growing production rates and investment in the pipeline Planned Investment in Chilean copper and gold mining is expected to exceed US$100 billion for One driver for investment is the Exhaustion of deposits and declining ore grades Industry is forecasting a gap of 45,000 new professionals by 2020 in order to fulfil projected growth and investment needs

Australia Unlimited Chilean Mining Industry Safety in mining :Major mines have global highest industry standards. chances of having an accident in are lower than banking industry. Always important and opened fro new solutions. Mine closure and remediation is an opening area of opportunity. Recently regulated (2012) and being a requirement for approval of new projects, it opened a whole new area of business. Key Market entry actions/opportunities: Participate at Expomin (Santiago) and or Exponor (Antofagasta) mining shows, and Austrade’s business program around those. Environmental issues increasingly important: Water management is critical and several technologies and actions are been undertaken (desal plants, other recovery technologies) Community relations is increasingly important and has stoped important investments.

Size of Chilean Copper Mines and their share of World Production Source: Brook Hunt

Australia Unlimited Chile’s Main Copper Mines Source: Cochilco Region I: Collahuasi Cerro Colorado Quebrada Blanca Region II: Escondida Spence Chuquicamata Radomiro Tomic El Abra Mantos Blancos Lomas Bayas Michilla El Tesoro Zaldívar Esperanza Project Gaby Project Region III: Candelaria Salvador Ojos del Salado Regalito Region IV: Los Pelambres Andacollo Region V: Andina El Soldado Metropolitan Region: Los Bronces Region VI: El Teniente

Australia Unlimited Major considerations to doing business in this industry: Understanding the Mine companies structure (projects, procurement, site vs. HQ, final users), and developing the right contacts and network (allies, industry bodies, potential partners) Management and key decision makers change too often, and suppliers have to be up to date with their “key clients”, be highly responsive (if not pro-active) to clients demands. Be ready to present your business contribution (innovative solution, costs), and adjust to time and resources constraints from procurement departments. As a highly competitive market all brands/products of the world can be found in the market. Procurement managers at big mining companies are looking for “Business relationships” with their suppliers instead of just sending brochures by and doing one off sales. This is specially critical once initial deals have been done. Setting operations in Chile gives a much better perception to the local business community/industry, and sets the ground for more business. Although is friendly and business oriented culture, there are language and cultural differences. Perception of distance and cost, and lack of local presence to support 24/7 the mine operations needs. Mines often in remote locations/altitude. How to service? Tremendous shortage of labour (particularly technical) Chile is looking for suppliers that can create a local capacity in the Mining Cluster located in the North of Chile. This strategy is supported co-led by BHP Base Metals and Codelco.

Australia Unlimited Positives US$100 billion valued pipeline of new projects and expansions in mining Hungry for best practice and new solutions. Australia is well recognized and positioned as a source for innovation and smart solutions in the industry. Limited domestic industry issues. 1 month timeframe to have a company up and running. Can build a local team confidently. Favorable geography: Short distances from sea shores to Andes Mountains, from cities (Antofagasta, Iquique, Copiapo) to mine sites. According to the World Bank “Doing business 2012” report, Chile is the easiest Latin American economy in which to do business. Efficient transport and communications services and world-class seaport, airport and logistics infrastructure.

Australia Unlimited What can Austrade do to help? Organised market visit – meet who you need to know Network of referrals to lawyers, accountants, interpreters and translators Assistance with government liaison in market Network with Australian mining companies and suppliers/engineering firms Participate in our Australian pavilions Join the linkedin group