Research and analysis

Chile: opportunities in the mining sector

Published 13 May 2014

0.1 Summary

UKTI HVO mining specialist confirms massive potential for UK mining expertise and equipment. Joins 80,000 visitors and 1,650 exhibitors from 36 countries at Latin America’s largest mining exhibition. Relationships consolidated with key mining interlocutors who welcome renewed UK interest. Likely quick wins of £8 million for UK Business in margins of exhibition.

0.2 Detail

Following the recently confirmed Chile mining HVO, mining specialist Darryn Quayle visited Chile from 27 April to 2 May joining UKTI Chile to launch our HVO campaign. We visited the EXPOMIN copper exhibition and national and world mining company executives resident in Chile to offer UK assistance in engineering, systems and technology. Our renewed interest was widely welcomed at all levels.

0.3 Sector outreach

Contact with wide ranging mining companies including CEOs and Purchasing Directors from the main mining companies confirmed the real potential for UK business in the sector. Interlocutors described the challenges the industry faces: a reduced world copper price, increased costs for labour, water and energy supply. These had contributed to a renewed and urgent focus on copper production costs and efficiency as miners sought to maintain revenue and margin from metal sales. Interlocutors felt that the HVO campaign was well timed to take advantage of this efficiency drive.

Interlocutors said that the Chilean Government had also begun to pay close attention to the drive for greater efficiency given its reliance on copper for around 40% (direct and indirect) of GDP and 60% of exports. During the visit, we passed on the invitation from BIS Minister of State Michael Fallon inviting the head of CODELCO water to the “Water in Mining Conference” in London in October. CODELCO is the state-owned copper producer, and the largest copper producer in the world.

0.4 Attendance at EXPOMIN

EXPOMIN 2014 - 50% larger than previous years - clearly reflected the demand from the sector for more efficient technology and equipment. Some 1,650 exhibitors attended from 36 countries attracting over 80,000 visitors. Competitors were there in force supported by country initiatives: China 136 stands, USA (107) Germany (62), Brazil (60) Canada (42) and Australia (35, over half of whom were new to market). Initial indications suggest around US$1.8bn of contracts for products and services were concluded during the week.

UKTI Chile were able to highlight the quality of British products and services during the expo to provide local buying contacts in mining houses that secured sales and trials of mining related products worth in the order of £3m. As an example, One UK sales director at the expo mentioned that in 25 years he has never seen such a positive response; for his equipment. He thought his company would reach their global sales target for the entire year on the basis of Expomin 2014 alone. Follow up contacts in the second week have secured additional trails and contacts for UK products and services, possibly offering up to £8m in total export wins over the two weeks.

0.5 Comment

A positive first step in promoting our new Chile mining HVO in a sector with huge potential (around $110bn). We will need to devote time and resources to win contracts in a very competitive market where others are well established. Ongoing support from UKTI’s HVO and Strategic Trade Groups will be critical – to ensure positive government-to-government contact at the forthcoming BIS London conference in October 2014 and strengthened UK presence in the market, including through a UK Country Pavilion at the EXPONOR exhibition in Chile’s mining capital Antofagasta in May 2015, and at Expomin in 2016 in Santiago.

0.6 Disclaimer

The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.