BMI View: Chile's mining sector value will continue to contract through 2017 as operational challenges dent copper output. Nonetheless, the country will remain the top global copper producer by a wide margin over our forecast period to 2021.
Latest Updates & Structural Trends
Chile's mining industry value will continue a multi-year decline through 2017 due to labour strikes at key copper mines. We forecast the country's mining industry value to contract by 1.9% in 2017, to USD21.1bn and climb higher thereafter, reaching USD24.7bn by 2021.
Chile, the largest copper producer, will face ongoing challenges, including declining ore grades, freshwater shortages and labour unrest in the copper sector. We revised down Chile's copper production forecast, from a 1.0% contraction in 2017 to a 5.0% decline due to weaker-than-expected output over the first few months and ongoing challenges from declining ore grades. We forecast Chile to produce 5.2mnt of copper in 2017, down slightly from 5.5mnt in 2016, and return to gradual production growth thereafter.