Chile’s commodity exports tied to Chinese economic growth, says Minister

SANTIAGO (Scrap Monster): The Chilean Minister of Mining Aurora Williams stated that any change in Chinese economy will have direct impact on the country’s commodity exports. She added that China will continue to remain as the key export market for several commodities including copper. Almost half of the copper produced in the country is exported to China.

Commenting on the current slump in copper prices, the Minister noted that the commodity had gone through a super cycle for several years, supported by China’s double-digit GDP growth. The fall in prices is attributed to the decline in Chinese GDP growth to 7%. However, volume of copper exports to China is expected to pick up significantly as the country comes back to its growth track. She expected the copper prices to recover soon.

According to the Minister, both the countries share a long history of bilateral trade. The bilateral trade between the two countries amounts to almost $35 billion. The trade figures are expected to shoot further with the commissioning of new mining projects.

The Chilean government has approved new mining projects worth nearly $76 billion, out of which nearly $61 billion pertains to copper. The government has ensured ample private participation in new mining contracts, whereby only 45% of the mines will be developed by state-owned Codelco. The balance 55% will be developed by private miners. In addition, the government also plans to explore mining possibilities of other mineral reserves including molybdenum and lithium.

The Minister noted that the primary concern of the government is to protect the jobs in the sector which are currently under risk due to falling commodity prices. Further, the Minister assured that National Mining Corporation (ENAMI) will continue to buy copper and other minerals from small and medium-sized enterprises (SMEs) at above market value during steep price-falls. In return, the SMEs are bound to return the profits when copper prices recover.