SANTIAGO – Chile’s economic problems stemming from low copper prices are being eased by the country’s countercyclical policies and the peso’s depreciation against the dollar, Mining Minister Aurora Williams said Tuesday.
In an interview with several international media, including EFE, she said the “super-cycle” of recent years has given way to a new reality of low prices of the red metal, which is at a six-year low and could end this year with an average price of less than $2.50 a pound.
The dollar’s current strength relative to the peso, however, has mitigated the consequences of the price drop, especially for the large mining companies.
In addition, state-owned mining giant Codelco, the world’s largest copper producer, and private producers have tightened their belts over the past two years to reduce costs, while the government has adopted countercyclical policies, the minister said.
The Public Works Ministry has launched an ambitious program of concessions and projects aimed at counteracting the decrease in mining revenues, while the government last year introduced a bill last year to capitalize Codelco and ensure financing for structural projects, Williams added.
“Expectations are they will rebound and that at some point we’ll have higher copper prices,” said Williams, who noted that mining accounts for nearly 60 percent of Chilean exports and 12 percent of gross domestic product.
Mining remains a dynamic and attractive sector for foreign investment despite some recent developments in the sector, including Canadian mining company Barrick Gold’s decision to suspend the Pascua Lama megaproject that straddles the Chilean-Argentine border high in the Andes mountains, the minister said.
“The projection is that over the next 10 years mining projects totaling $76 billion will be carried out,” Williams said, adding that 80 percent of that total will correspond to copper mining and Codelco will carry out 45 percent of the projects, with private companies accounting for the remaining 55 percent.