Chile is the world’s largest producer of copper. It is also an important producer of molybdenum, iron ore, lithium, gold and silver. In 2008, Chile produced 39.2 tonnes of gold of which 24.8 tonnes (63%) was from gold mining, the balance being largely a by-product of copper production. Chile also produced 1,405 tonnes of silver, making it the fifth largest producer of that metal.
Sources: USGS and Cochilco
The country is an established democracy with bicameral parliament and executive president elected every four years. There is strong respect for the law, a stable mining regime and balanced taxation system. There is no discrimination between foreign-owned and locally-owned entities, and the security of tenure over exploration and mining leases is strong. Investment capital and profits may be repatriated at any time although withholding taxes apply to dividends and interest. There are free trade agreements with the USA, Canada, Mexico, European Union, Australia, New Zealand and China amongst others, and double tax agreements (“DTA”) with several countries. The DTA with Australia has been agreed to but is not yet signed.
Chile was admitted to the OECD at the beginning of 2010.
All these attributes have encouraged large scale foreign investment in Chile’s mining sector for more than 25 years This has resulted in the development of world class mines such as Escondida, Zaldivar, Spence, Lomas Bayas, Los Bronces, Los Pelambres, Collahuasi, Candelaria, El Peñon, La Coipa, Maricunga and others. Barrick Gold Corporation recently announced the development of the giant Pascua-Lama gold mine, which is estimated to cost US$3 billion and annually produce approximately 800,000 oz gold and 35 Moz silver in its first five years.