CHILEAN COPPER INDUSTRY Insights and Challenges
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Logo Gobierno: 160x162px. Ministerio, Subsecretaría, Organismo, etc.:160x145px CHILEAN COPPER INDUSTRY Insights and challenges Jorge Cantallopts Director of Research and Policy Planning Chilean Copper Commission @CochilcoChile Jun 27th 2017 AGENDA 01 02 03 04 CHILE AND IT´S TIME FOR NEW FINAL THE MINING A CHANGE CHALLENGES – REMARKS NEW VISION 01 CHILE AND THE MINING Mining Ministry | COCHILCO • Chile, leader in Latin America .Highest GDP per cápita in Latin America. .Strong presence of FDI (~7% GDP) .Foreign Investment Regime: 3°in the world (EIU 2015-2019) .Global Competitiveness: 35 among 140 countries (WEF, 2016) Competitiveness Strengths: . Solid institutions . Macroeconomic stability . Human Capital . Financial development Mining Ministry | COCHILCO Source: InvestChile • A connected country Access to several markets 85% of Global GDP. 93,8% of exports markets. 65% of world population. Double taxation Investment protection treaties agreements with with 76,4% of world GDP. 25 countries Mining Ministry | COCHILCO Source: InvestChile MINING IN CHILE EXPORTATIONS FOREIGN INVESTMENT 57% 2003-2016 18% 2005-2015 Tax Revenue 18,4% 2003-2016 Mining represent 13% of GDP 2003-2016 Source: Banco Central de Chile, INE and FMI Mining Ministry | COCHILCO * Quarter December 2015 -February 2016 (INE) • Most important world mining reserves 1.5 Canada 4.2% Russia % 4.6% United States 4.2% China 6.4% Mexico 2.8% Zambia DR Congo 2.8% 11.4% Peru 12.2% Australia Chile 29.2% 20.8% Others countries • Main copper reserves. • Important gold, silver, molybdenum and potassium reserves. • Main lithium reserves. Mining Ministry | COCHILCO Source: USGS Mineral Commodity Summaries (2016) • Mineral endowment Mining Ministry | COCHILCO Source: USGS MineralFuente: Commodity Cochilco, basado Summaries en Maksaev (2016), y otros GFMS (2007). (2016) 02 IT´S TIME FOR A CHANGE Mining Ministry | COCHILCO COPPER PRODUCTION AND ITS IMPACT IN THE CHILEAN ECONOMY COPPER PRODUCTION AND ITS IMPACT IN THE CHILEAN ECONOMY COPPER PRODUCTION AND ITS IMPACT IN THE CHILEAN ECONOMY 03 NEW CHALLENGES – NEW VISION Mining Ministry | COCHILCO TREND ON MINERAL POLICY Mineral policy based on economic development LOW LEVEL DEVELOPMENT ADVANCED First stage R+D+i Exporting mining, services Suppliers and supplies development Economic rent distribution Investment attraction Geological potential and mineral rights Source: COCHILCO @CochilcoChile NEW MODEL PROPOSAL Source: Cochilco Main Goal Creating value Pillars Mining METS Productions Productivity Strategies Market Community Share Participations Government Workers Junior C. Mayor C. NGO Players Universities Providers Codelco S&M Mining and TC Funding Human Capital Infrastructure Market drivers Environmental Investment Innovations Tech Transf Governance policies Climate Key Drivers Water Land Electricity Sustainable basis Geological Communities Environment potential RECOVERING THE MOMENTUM Multiplayer solutions Challenges Reducing conflicts Workers Environmental permisson system improvement Providers Junior C. Productivity improvement Increase linkages State Governmet Mayor C. Companies Universities NGO and TC S&M Mining REDUCING CONFLICTS 1 2 3 4 Identification Early Knowledge of of actors and consultation Company´s community´s area of and reputation influence participation culture FACTORS THAT DETERMINES THE RELATION Expectation Development Natural resources and benefits of local availability and distribution capacities distribution 5 6 7 ENVIRONMENTAL PERMISSON SYSTEM IMPROVEMENT • Incomplete Not allowed to report process • Missing 19 information Reasons % of projects Solutions: 8% Requirements in a of simpler way project • Lack of s } 23% experience of Big size of projects medium size Create a simple mining miners template for the Medium reports size • Requirements mining presented in a complicated way PRODUCTIVITY IMPROVEMENT 180 400 350 160 • Productivity is behind 300 Chile’s success in the last 140 30 years 250 120 200 TPF 150 100 Commodities’s Super Cycle 100 80 Latin American GDP/ Debt Crisis 50 pc 60 0 Annual TFP growth rate (%) • Aggregate TFP slowdown 1990/2000 2000/2010 2000/2015 since 2000 with Mining Aggregate TPF 2.3% 0.3% 0.1% being one of the biggest sectors Aggregate TPF 2.3% 1.6% 1.4% without Mining Source: The Conference Board. 2016. The Conference Board Total Economy Database http://www.conference-board.org/data/economydatabase/ 19 INCREASE LINKAGES Creating value • Providers Development Programs (Alta Ley, FCH, Mining METS Corfo). Producción Productividad • ScienceEstrategias and technology programs(Conycit). Participación Participación de mercado ciudadana • Including providers in the Estado Trabajadores Junior M. Privada mining developmentActores ONG strategy (Cochilco) Universidades Proveedores Codelco PyM Minería e IT Financiamiento Capital Humano Infraestructura Factores de desarrollo Institucionalidad Gobernanza Transferencia Ambiental Innovación Tecnológica Factores críticos Agua Territorio Energía Sustentabilidad del Recursos y Medio Comunidades Fuente:negocio Cochilco minero Reservas Ambiente 04 FINAL REMARKS Mining Ministry | COCHILCO Chile is in another step Adding Value is the new goal Multiplayer solutions are the only way Logo Gobierno: 160x162px. Ministerio, Subsecretaría, Organismo, etc.:160x145px CHILEAN COPPER INDUSTRY Insights and challenges Jorge Cantallopts Director of Research and Policy Planning Chilean Copper Commission @CochilcoChile Jun 27th 2017.