2013: The year mining challenges will start seeing the light
31-Dec-2012 El Mercurio – News
Mining sector in quest of higher competitiveness
2013: The year mining challenges will start seeing the light
Labor shortage and high production costs are some of the concerns in the Chilean mining sector, however a solution is expected to be found with the arrival of this new year
This recently born 2013 will be a crucial year for mining industry. The productive sector will be leaving behind a year full of projects stoppages and will welcome a 2013 with high expectations on achieving the solutions the mining sector needs to secure its sustainability in time.
Because in spite of the 45 large projects amounting to US$104.3 billion estimated investment the 2012 brought to the mining portfolio, in the second half of the year the figures announced a downward trend.
High costs, lack of labor, and the international financial conditions were some of the many reasons for which 12 of these projects were postponed or left in standstill condition thus reducing the estimated investments of the sector in US$40,600 million.
Adjustments and solutions
However, and in spite of this, 2013 can still be forecasted as promising year.
Alberto Salas, President of National Society of Mining, considers 2013 will be a year to report a “6% growth with copper production reaching 5.8 million tons and exports about US$55 billion”.
However, the starting year will also be a time when mining companies will be thinking of what is next after the prices super cycle the metals are currently experiencing and the high-cost operation these companies are forced to be working at.
“Hindrances were clearly identified in 2012, we assessed their impact, and outlined solutions. 2013 will be the year for realization of proposals aimed at keeping the world leadership of our mining industry”, Joaquín Villarino, CEO of Mining Council, states.
As the head of the Mining Council states, for standby projects to reactivate it is necessary to eliminate the main challenges the mining sector is facing today in Chile: energy, water supply and human capital.
Although neither the most optimistic of miners think these challenges will be completely solved during 2013, it is expected that during these 12 months some steps are taken to find the solutions the mining industry calls for.
During the first half of next year the Government will restart the feasibility studies to add nuclear power to the energy matrix and will continue evaluating the Aquatacama project.
However, these projects will at least require 10 years to complete its execution and start-up processes.
Human capital requires shorter time as in 2013 a boom will be reported for mining-focused professional-degree-aimed university enrollment openings. But we will still have to wait and see how successful the enrollment opening is, and even wait longer to integrate the dropping out percentage, a key factor to keep the high investment level in the sector.
Notwithstanding, this starting cycle is also bringing other mining tidings. Today, December 31, 2012, the 2005-established tax model finishes and starting tomorrow the mining companies will reduce by 30% their tax payment obligation with respect to 2012 as reported by the Budget Direction of Ministry of Finance of Chile.
The Government has also set the first half of 2013 to start the consultation to indigenous communities as agreed in the Agreement 169 of ILO, a regulation that will put US$10,680 million worthy projects under revision.
