Brazil & Southern Cone - July 2017 (ISSN 1741-4431)

Growth forecast cut: On 10 July Chile’s finance minister, Rodrigo Valdés, announced that the Michelle Bachelet government has updated its growth projections for 2017 and is now forecasting that GDP will grow by 1.5% this year, down from the 2.25% forecast made in September 2016. Valdés said that economic activity has been impacted by the miners’ strikes (see sidebar), while the country has also had to deal with unforeseen issues such as widespread forest fires in the south earlier this year. Meanwhile the latest figures for the monthly economic activity index (Imacec), released by Chile’s central bank (BCCh) on 5 July, shows that there was a 1.3% increase in economic activity in May compared with the same month last year. The mining Imacec was down by 4.6%, while the non-mining Imacec was up by 1.9%.

Lithium: On 10 July Eduardo Bitran, the vice-president of the Chile’s economic production promotion agency (Corfo), announced that 12 companies from seven different countries had presented projects to manufacture value-added projects from the country’s lithium. The winning project will secure a steady supply of the metal at a favourable price, part of a deal Corfo made with US-based lithium producer Albemarle Corp, which has operations in Chile. Bitran told journalists that the proposals include projects to create “next-generation” batteries, lithium salts, lithium metal, and several other materials. Of the 12 companies that presented projects, a quarter were Chilean, while the other nine were from China, South Korea, Belgium, Russia, Canada and the US. A Reuters newswire also cited Bitran as saying that the selection process should be completed around January 2018 and that more than one winner could be selected.

Chile currently has one of the largest lithium reserves in the world, producing approximately 80,000 tonnes (t) of lithium carbonate per annum; a figure which is expected to rise to 150,000t by 2021. An agreement approved on 4 January between Corfo and Albermarle (which owns a plant in which lithium carbonate from the Salar de Atacama is produced), requires that a percentage of the lithium extracted in Chile be manufactured domestically. This means Chile can export higher value-added products and develop a domestic industry around this increasingly sought-after resource. Bitran hailed the latest interest in Chile’s lithium as a “great success”, stating that as a result Chile would be able to enter fully into the global electromobility industry.

• Escondida losses

The local press has reported that the La Escondida copper mine, which is controlled by the Australian-headquartered multinational miner BHP Billiton, registered losses of US$184m in the first quarter of 2017, down 169% compared with the same period last year. This stems from the 44-day-long miners’ strike that ended on 23 March, which resulted in a 63% fall in production at La Escondida compared with the same period last year, with the mine producing 97,103 tonnes (t) of copper during the period.