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Significance
This is preventing the country from taking full advantage of strong copper prices to the benefit of both the trade balance and fiscal revenues. Recent figures from Codelco, the state copper producer, show a particularly sharp downturn in output.
Impacts
Copper exports have helped to contain a current account deficit that reached 6.6% of GDP in 2021 and is estimated to reach 6.3% this year.
Declining production suggests that Codelco could lose its position as the world’s largest copper producer to BHP.
Until future mining taxes are defined, the industry is likely to continue to defer final investment decisions.
Copper markets will be underpinned by demand related to decarbonisation in the form of renewable energy production and electromobility.
Keywords:
Chile,
LA/C,
economy,
industry,
politics,
foreign investment,
foreign trade,
metals,
mining,
reform,
corporate,
environment,
fiscal,
government,
legislation,
regulation,
water,
Metals & mining
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2022
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