Mining & Investment Insights
Curated interviews, articles and deal case studies that focus on mining investment opportunities in Latin America. Please contact Harry.Williams@gfcmediagroup.com if you have a case study and/or insights to share with the community.
This article was originally published by Global Business Reports (GBR). It has been reprinted with permission.
For more than three decades, Chile was the poster child of neo-liberalism, the country that followed diligently the IMF playbook. Such discipline was rewarded with impressive growth and the envy of its Latin American peers. By 2010, pundits predicted that Chile was but a few years shy of becoming Latin America’s first “developed” nation. The latest down-cycle, marked by both low copper prices and the flirting with expanded government, created a new set of obstacles for Chile. The question hovering over voters ahead of the Presidential elections in November is, “Can Chile get its groove back?”
Minera Escondida a Chilean subsidiary of BHP Billiton, secured a US$1.2bn 5-year term loan at competitive prices to help the miner develop the world’s largest open-pit copper mine. The deal consisted of one of the largest US dollar syndicated facilities in Chile’s metals and mining industry to date.
Unlike other metals, copper prices have stayed around their January lows, which have led Chile’s Codelco to lower its output. This is unlikely to impact copper prices much, as other Andean countries are ramping up exports of the commodity. The weaker fiscal position of Codelco is actually attracting investment, however, as the assets of Andean nations such as Chile and Peru do not offer sufficient returns for some.
Business confidence has been hit in Chile on concerns over the implementation of a number of reforms across the country. However, the positive performance of the Chilean Central Bank and Ministry of Finance has continued to place the country above many of its peers in Latin America. Nevertheless, the performance of the country’s economy remains heavily tied to the price of copper, the leading driver of the Chilean economy.
High levels of oversubscription on Codelco’s local currency bond suggests the country’s local markets remain liquid as its outlook and fiscal situation continues to stabilise.
16 Apr 2019
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