- Mining.com reported that BHP, one of the biggest copper producers in the world, might have to “reconsider” investing the additional $10B (yes, with a B) in copper exploration in Chile, if the government goes through with hiking mining royalties (taxes).
- Chille is the biggest copper-producing country in the world by a long shot, producing almost twice as much as second-place holder Peru.
- Chile now has leftists leading the country. If history is any indication, we may expect this to be detrimental to foreign investments, many of which are related to the mining industry.
- Chilean leftists want to raise mining royalties and have gone as far as to call it “their #1 priporty”. They promise to use the additional income to fund social programs (that nobody asked for).
- “Smart” countries like the US & Canada always assumed that they can just export “dirty” business to “lesser” countries and that it’ll be fine. “Let them come up with all the copper that we use for our communication, health care, transport, and energy sectors”. Turns out that might bite them in their sitting muscles sooner than expected.
- Having neglected – and directly opposed, on some occasions – copper investments in more developed countries, we should be very worried about where our copper supply will come from, if companies like BHP stop the flow of investment dollars in countries like Chile.
- This is only the first of many companies to consider pulling out, experts are saying. Other companies operating in Chile include Glencore, Anglo American, Freeport McMoRan and Antofagasta.
- Sustained exploration and development investments are a necessicity in the mining space because of the type of business these companies are involved in. They – literally – mine themselves out of business – by depleting their resource – if they don’t reinvest the profits into discovering more material to mine.
- Eventually – unless investments in the copper space in the West are welcomed with open arms – we’ll come to a point where there isn’t enough copper to meet demand.
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