Chile’s economic prosperity has been largely fueled by its copper mines, and since India’s demand for copper is expected to rise rapidly over the next decade, Chile’s commodity-exporting future is looking bright. From MercoPress:
COCHILCO, Chile’s copper commission, estimates that by the end of this decade, India’s demand for copper will rise from the current figure of 610,000 tons to between 2.4 million and 3.6 million tons annually.
Due to broad economic growth, India’s increased demand for copper is set to move the nation from sixth place in world consumption of copper to second, just behind China, which accounts for 34% of global copper production, or about 7 million tons.
India is expected to overtake the United States, Germany, South Korea and Japan with this increased consumption –nations whose copper demand today is greater than India’s, but still far behind China’s.
This sharp increase in demand is expected to have an effect on world copper prices.
“With India playing a growing role in the market, the price of copper in the long term would rise about 10%, which is to say, by 20 cents more for each pound,” explained COCHILCO economist Erik Heimlich.
India’s growth rate is also expected to surpass China’s in the next few years, Heimlich said. As a result, Heimlich predicts, “India should change its production structure from services toward more copper-intensive areas”.
Such a shift will allow development of both greater internal consumption, and larger manufacturing production for export.
Heimlich added that copper refinery operators in India had already begun contacting COCHILCO about establishing long-term relationships with Chilean copper producers to supply their growing needs.
Copper production, the principal driving force behind Chile’s economic strength, has brought the country high profits in recent years.
Copper prices Tuesday reached US$4.01 per pound, the highest since June 2008. The rising prices are rapidly approaching the all-time high in June 2008 of US$4.07 per pound.
So far, the average copper price for 2010 is US$3.32 per pound, with a monthly average of US$3.87 per pound.
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Real Time Market News | Dow Jones
Chile is a step closer to sealing a free-trade agreement with India, the remaining economic superpower it has yet to sign one with.
The Andean nation currently has various types of free-trade agreements with 58 countries, including the U.S., China, and the European Union, representing 60% of the global population.
Chile and India signed a preferential trade agreement that has been in force since 2007, making Chile India’s first trade partner in Latin America. The two countries now look to deepen their investment and trade ties.
“I firmly believe that we need to set the foundation to be able to take this relationship to the next level….There are tremendous amount of complementarities between both our economies,” India’s Commerce and Industry Minister, Jyotiraditya Scindia, told Dow Jones Newswires. Despite being on opposite sides of the world and having vastly
different economies, India and Chile are both on firm footing
following the global financial crisis.
Chile is one of the world’s leading exporters of natural
resources such as copper, woodpulp, fishmeal, nitrates, iodine,
molybdenum and lithium.
Technorati Tags: india, chile, trade
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Dow Jones
Sociedad Quimica y Minera de Chile SA (SQM, SQM-B.SN), one of the globe’s leading fertilizer and specialty chemical producers, will expand into Brazil and is evaluating setting up shop in India, the company’s chief executive was quoted as saying Friday by daily newspaper El Mercurio.
SQM, which is the global leader in iodine and lithium production, expects to initially open up a 40,000 metric ton per year fertilizer plant in Brazil and eventually expand capacity, SQM CEO Patricio Contesse told the paper, without providing a timeline.
As the global population inexorably rises so does the appetite for products SQM provides, such as specialty fertilizers used in agriculture or lithium, a key component of technology like laptop computers, mobile phones and electric car batteries.
Technorati Tags: india, chile, fertilizer, SQM
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Chile has made great strides since the end of the Pinochet dictatorship in 1990. Under Pinochet there was extreme political repression, including at least 3,000 people who were “disappeared” and murdered because of their political opposition to the regime. In the last 20 years Chile has enjoyed rapid improvements in its economy and society, but mistrust of the military has remained strong.
With the recent earthquake and ongoing aftershocks, however, the Chilean military has begun to redeem itself in the eyes of the citizenry. Outgoing Chilean President Michelle Bachelet has deployed thousands of troops to the hardest hit areas, and they are doing a commendable job of orchestrating search and rescue missions and maintaing security. It is revealing, however, that distrust of the military was strong enough that it took two days of widespread looting and crumpled infrastructure after the quake before President Bachelet was willing to call upon the military for help.
The military’s history might be one of oppression and fear, but residents seem to be thankful for a military presence in this crisis. From the NY Times:
In Chile, the military clearly evokes mixed emotions because of the role it played in the torture and disappearance of some 3,000 Chileans during this country’s bloody 19-year dictatorship.
But in the five days since Chile was shaken by a magnitude 8.8 earthquake, one of the worst natural disasters in its history, the military’s relationship with the country’s people was turning a new page.
Tanks were stationed outside supermarkets that had been looted and vandalized for two days before the troops arrived. Soldiers organized lines for residents to enter banks, pharmacies and gasoline stations. And for the most part, emotional and exhausted residents like Mr. Ramírez embraced them.
…
“The military arrived so late here,” said Mrs. Henríquez, 49. “The looters took everything in this city, even the lights in the supermarkets. It was dreadful. And all because the president was worried about what happened in 1973. We don’t care about that now. We want order, not chaos.”
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Reuters
Asian urbanization coupled with the electrification of the auto industry should be a boon for copper prices and a huge benefit for copper mining countries such as top producer Chile, mining financier Robert Friedland said on Thursday.
Speaking at the CRU/CESCO copper conference in the Chilean capital of Santiago, Friedland said massive Chinese demand for automobiles that will increasingly be powered by copper-consumptive electric technologies will turn the red metal into “red gold”.
“I absolutely believe that red gold is going to… outperform,” said Friedland, who is best known as chairman and founder of Ivanhoe Mines (IVN.TO) and for discoveries such as the Voisey’s Bay nickel find in eastern Canada.
Friedland pointed to a report in the New York Times that China plans to boost its annual production of electric or hybrid cars to 500,000 in the next two years from 2,100 last year, saying such a shift would require huge amounts of electrically conductive copper.
“Within a few years, China will lead the electric car industry,” he said. ” The implications for the copper industry are stunning.”
He also pointed to increased demand for products such as air conditioners in countries like China and India as a key driver of the metal.
Technorati Tags: chile, india, china, copper
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Last week, I had a chance to spend a few days in Santiago Chile. I came away thinking that it will be the first country in LatAm to attain first world status. It already is well on its way there currently having highest GDP per capita in the region.
Simple things – the taxi drivers at the airport are polite, the highways into the city are perfect, the hotel staff (not 5 star) are friendly. I visited ProChile – affiliated with the government’s Ministry of Foreign Relations, tasked with promoting Chile’s exports. Their offices convey an air of seriousness and professionalism – not that of a slow-moving, laid-back government office. It can go up against the very best of a private sector company in the US or Europe. Their brochures and materials are well-designed and aesthetically-pleasing, building the confidence in foreign buyers for Chilean-origin.products. I feel Indian Small to Midsize companies lack governmental support in this regard – with respect to nicely-designed product catalogs. This would be key to be successful in Latin america where quality of sales materials are scrutinized closely in the sales process.
I also visited CORFO – the Chilean investment promotion agency. They maintain a list of projects that are seeking funding and are willing to co-invest with foreign investors. Many interesting projects in the renewable energy space including wind and biomass.
Lastly, I stopped by the India Show expecting to see the Tata Nano. Many other visitors expected the same going by local newspaper coverage. Tata Motors decided to feature its Xenon pickup which they are launching in Chile this year with local partner SKBerge.
Chile offers investment possibilities for Indian companies in agroprocessing, forestry, renewable energy and IT (TCS employs 2000 people in the country!). Chile has trade agreement with 54 countries including FTA’s with the US and the EU. This makes it a great springboard to do business in the region. As a bonus, it is a country with diverse landscapes from deserts to glaciers, offering fantastic adventure tourism options. Take a look!
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The Hindu : National
Michelle Bachelet, the first woman President of Chile, will arrive here on Monday on a five-day visit. She is expected to be accompanied by a high-level delegation, including the Ministers of Agriculture and Women Empowerment and a business delegation.
“India and Chile have enjoyed fruitful relations since the early days of Independence. It comes to mind the fact that according to our records the only country from South America present at the ceremony of Independence in 1947 was Chile,” noted the Ambassador of Chile in India, Alfonso Silva Navarro.
“[The year] 2008 was auspicious enough to have witnessed the State visit of Ms. Pratibha Patil to Chile, marking a new high in bilateral relations. On the occasion, new understandings were reached in areas such as civil aviation, Antarctica cooperation, science and technology, agriculture and energy, thus deepening the scope of cooperation in these fields,” he added.
Technorati Tags: chile, india, trade, bilateral cooperation
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