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SEPT. 30, 2020

Minister Prokurica announces a US$74 billion mining investment portfolio up to 2029

The Minister highlighted that new projects have increased by US$1.5 billion since the last report in 2019. Many of these initiatives will become operational in the period 2020-2024, with the first being implemented in 2021.

On Wednesday, Chile’s Mining Ministry and the Chilean Copper Commission (COCHILCO) released a report on Chilean Mining Investments - Project Portfolio 2020-2029, which announced five new projects together with adjustments to other initiatives that bring total mining investment to US$74 billion. This figure is US$1.5 billion higher than that published in the 2019 investment report.

The new portfolio contains 49 projects — five more than last year's report — and 89% of them are copper mining projects, equivalent to 31 initiatives. There are six gold projects, two iron projects, five lithium projects and one industrial minerals project.

The new projects added to the portfolio are as follows. Teck's Carmen de Andacollo operational continuity project of US$100 million; Lundin Mining's Candelaria operational continuity project of US$600 million; AMSA's Polo Sur project of US$300 million; and Nittetsu Mining's Arqueros medium mining project of US$200 million. The fifth initiative will reactivate the Kinross Lobo-Marte project of US$995 million as a potential continuity of the La Coipa mine.

Many of these initiatives will become operational in the period 2020-2024, with the first being implemented in 2021.

A very important consequence of this investment is the enormous number of job opportunities in the mining industry it will create in the medium and long term. We estimate that 33,000 new jobs will be generated by 2023.

Minister Prokurica: "Chilean mining remains attractive to investors around the world"

Minister Baldo Prokurica highlighted the significant increase in investment of more than US$1.5 billion compared to 2019 as "great news, which means Chilean mining remains attractive to investors around the world. This is especially important at a time when the coronavirus pandemic has impacted the economy, employment and overall economic prospects.”

The Minister added that "despite all the national and international turbulence, our mining industry will continue to drive Chile’s economic recovery and employment. A very important consequence of this investment is the enormous number of job opportunities in the mining industry it will create in the medium and long term. We estimate that 33,000 new jobs will be created by 2023.

The Executive Vice-President of Cochilco, Marco Riveros, said this portfolio was an important signal of Chile’s future economic reactivation, given that mining represents 10% of Chilean GDP.

He added that this report is also important for mining suppliers, as it is an indicator of the potential dynamism of this industry over the next decade.

He also highlighted projects that have been optimized, as their increased investment mirrors significant changes in size and recoverable products. One such project is Codelco's Sulfides RT Phase II project, where the production capacity has been increased, which has implied changes to its timeframes and investment. Another important project is Capstone Mining’s Santo Domingo project. They are restructuring their mining plan to include an option to recover battery-grade cobalt, in addition to producing copper and iron. Accordingly its investment will increase from US$1.7 billion to US$2.1 billion.

These new initiatives and optimized projects are offset by some restructuring that implies a reduction in investment of US$650 million.

The Antofagasta and Atacama Regions have attracted the most investment

77% will be invested in northern Chile, where 87% is for copper mining.

The Antofagasta Region leads mining investment with US$25 billion — 33% of the total portfolio — with copper accounting for 96% of this investment.

In second place is the Atacama Region with US$18 billion and a 25% share, where copper accounts for 81% of this investment, although gold is also important with 14%. It is followed by the Tarapacá Region with US$9 billion and a 12% share, with copper taking up 96% of this investment.

Production contribution

The report states that the maximum production contributed by new copper projects between now and 2029, without considering investment conditions, would be 3.3 million tons of fine copper, of which 92% would be in concentrates. There are also five projects that would extend production from current mines by 436,000 tons of fine copper.

There are six exclusively gold and silver projects that would contribute a maximum of 27 tons of gold and 40,408 tons of silver. There are four copper projects with gold production in concentrates, which would contribute a maximum of 9 tons.

The maximum contribution from iron projects would be 11 million tons, and around 9,200 tons of molybdenum.

Lithium projects would contribute a maximum of 200,400 tons of carbonates and 35,100 tons of hydroxides.