1. Business Opportunities: Chilean Mining Industry Carlos F. Capurro Senior Commercial Advisor U.S. Commercial Service Santiago, Chile Image courtesy NASA GSFC, MITI, ERSDAC, JAROS, and U.S./Japan ASTER Science Team

2. Chile?

3. Geography 2,600 miles long Just 100 miles wide (average) Diverse climate and geography Opposite seasons from the U.S.A. Isolated by mountains, desert and sea 16 million population Principal city and capital - Santiago

4. Brief History Spanish Colony 1541 – 1810 Socialists take power 1970 Military coup 1973 “Chicago Boys” take charge Open economy begins to grow - 1974 Structural changes - 1981 Democratic elections in 1989

5. Chile Today President Michelle Bachelet took office March 11, 2006 (2006-2010) “Concertacion” Coalition Socialists Party for Democracy Christian Democrats Broad Consensus – No Change Open Economy – Free Market Democratic Institutions

6. Why Chile?

7. Sustained Economic Growth

8. Unemployment Level Source: Banco Central de Chile

9. Price Stability Annual Inflation (%)

10. Free Trade Agreements Steady economic growth Prudent fiscal policies Stable democratic government Solid business practices Rule of law Business - Why Chile?

11. U.S.-Chile Trade Agreement 95% + of bilateral trade in goods duty-free 75% + of U.S. farm goods duty-free by 2008 Stronger protection of intellectual property rights (IPR) Open and fair government procurement Commitments on labor rights and environmental protection Visit our U.S. Exporters Guide to the US – Chile FTA at http://www.buyusa.gov/chile/en/ftaguide.html Effective January 2004

12. U.S.-Chile Trade Merchandise/Goods (In US$ Billion)

13. Construction Computer Hardware / Software & Services Electric Power Equipment Environmental Technologies & Services Financial Services Food Processing & Packaging Equipment Best Prospects for U.S. Exports

14. Best Prospects (cont.) Medical Equipment & Healthcare Mining Equipment Plastics Machinery & Materials Security Equipment & Safety Telecommunications Equipment & Services Travel & Tourism

15. Market Overview U.S. Position Competitors Commercial Opportunities Other Resources Mining Industry Overview

16. Market Overview Mining explains 7.8% of Chile’s GDP and 66% of the nation’s overall exports in 2007. Chile is the world’s number one producer of: –Copper 37.5% –Molybdenum 28.1% –Sodium & Potassium Nitrate 100% –Lithium 42% –Iodine 55%

17. Chile is also a large producer of: –Borates (9.9%) –Silver (7.3 %) –Gold (1.8 %) –Rhenium And produces substantial amounts of gold and silver Market Overview

18. 130 Mining companies (5.7 million tons) –18 companies produce 70% 275 supplying companies –APRIMIN: 50 companies – Selling US$ 3.5 billion (47% imp.) 1,800 reps/distributors –2,500 products & services Market Size Market Overview

19. Expects to average annual growth of 6% from 2008-2015 Projected investments exceeding US $15 billion Foreign investment has been the key: 1974-2006 $21 billion or 33% of all foreign investment. Market Overview

20. Foreign Direct Investment in Mining ($21.1 billion 1974-2006) Source: Chilean Foreign Investment Committee Market Overview

21. Chile: Mining Imports Source: COCHILCO, based upon Chilean Customs Data (Sept. 2007) Market Overview Billion

22. Market Share by Main Supplying Countries Source: COCHILCO, based upon Chilean Customs Data (Sept. 2007) Market Overview U.S.-Chile FTA

23. Competing Mining Suppliers Market Share by Country (2007) Source: Chilean Customs Data

24. Copper Prices January 1998 – 2008 ($ cents/lb) Source: Chilean Copper Commission – COCHILCO (www.cochilco.cl) Feb 22, 2008  $ 378 cents /lb

25. New Copper Mining Projects (2008-2015) Source: COCHILCO: Based on companies press releases and own data compilation

26. How this translates into real business? 2005: $ 2.9 billion Operational Expenses

27. –Cranes –Screening machines –Environmental system solutions (water treatment, air pollution/dust abatement, mine closures) –Underground mining technology services –Wear-resistant materials Source: Revista Minería Chilena, Ministry of Mining, El Mercurio, Diario Financiero –Off-road trucks (240-440 tons) –Scoop shovels –Giant tires –Crushers –Grinders –Cabbed truck chassis (+ 50 tons) –Part for rock cutters –Excavators Capital Goods Demand How to translate all this into real business?

28. 2005: $ 1.7 billion Imports

29. How this translates into real business? Source: COCHILCO, Dec. 2007 2007: 5.7 million tons of copper Yearly Demand US$ Million/Year 65 off road load trucks$247 19 giant front loaders$74 Drilling and underground transportation equipment $22 24,800 tons Explosives$16 24 LHD$11 500 Tires$10 2011: 6.5 million tons of copper

30. Electronic Purchasing Systems Quadrem  www.quadrem.com CODELCO  www.codelco.com Chile Compras  www.chilecompras.cl SICEP  www.sicep.cl How to translate all this into real business?

31. A Must EXPONOR EXPONOR Antofagasta, June, 2009 www.exponor.cl EXPOMIN EXPOMIN Santiago, May 2008 www.expomin.cl

32. Need Help? Count on Us! U.S. Commercial Service Carlos F. Capurrocarlos.capurro@mail.doc.gov Tel: 011-56-2-330-3307 Fax: 011-56-2-330-3172 Andres Bello 2800, Las Condes, Santiago Chile

33. Looking forward to see you soon in Chile Many thanks for you kind attention