How Chile looks to boost exports of mining suppliers

Chilean export promotion agency ProChile is looking to increase the small footprint of the country's mining suppliers in international markets.

Last year 432 mining suppliers exported goods and services worth US$681mn, or just 0.8% of Chile's total exports of US$89.9bn.  

The figures come from a report the government’s international relations department (Subrei) produced in collaboration with ProChile and that was presented at an event.

"This study is our main input, from which we will work through a public-private group to determine the challenges for 2023 and measure the actions and results of the sector's internationalization process," Marcela Moya, head of the industry 4.0 area at ProChile, told BNamericas.

"We’ve already advanced a lot with our work. However, a new type of supplier is emerging and we want to add all the players to this chain of exports,” she added.

There are currently 401 mining suppliers that sell goods and 83 that offer services, and 87% of their exports go to Latin American markets. Peru leads with almost half of the total (49%) followed by Brazil and Mexico.

The main products sold abroad are alloy steel bars, iron or steel grinding balls, ammonium nitrate, parts for machines designed to separate, crush or grind minerals, ethylene polymer tubes, blasting caps, parts for probing or drilling machines, bars for perforation of alloy steels, and pumps, Nelson Paredes, head of commercial information at Subrei, told the event.

The most exported services are IT consulting and technical support, software design, and engineering services for copper mining and metallurgical facilities.

Brazil is a market with attractive growth potential for Chilean mining suppliers due to an increased focus on remote operations since the COVID-19 pandemic, Fernanda Franco, ProChile's commercial representative in the city of Belo Horizonte, said at the event. 

As an example of this trend, she mentioned Brazilian iron ore mining giant Vale, which has begun to operate the Brucutu mine in Minas Gerais state with autonomous trucks.

In Brazil’s mining sector there is strong demand for products and services in the supply chain and maintenance areas, as well as grinding equipment, Franco said.

"Chile is a country with a mining vocation par excellence and it is one of the few countries that have mining suppliers with such a wide offering, from the exploration phase to the closure of the site, that is, the complete process," she said.

Brazil's bureaucracy and its complex tax system are the biggest obstacles that suppliers from Chile – the world’s largest copper producer – face. "Brazil is not a nationalistic country, but rather a very bureaucratic one," Franco said.

In the case of Mexico, which is the world's largest silver producer and a top 10 producer of gold and copper, the opportunities for suppliers are chemical inputs for processing, optimization services for processes and geology, spare parts for trucks, technological solutions, and drilling and grinding machinery, said Marcelo Sobarzo, who is ProChile’s commercial attaché in Mexico. 

Mexico has close to 1,500 mines that are operating and 1,150 exploration projects, he said.

The biggest challenge in the Mexican market is to compete with already well-established suppliers from Canada, Australia, South Africa and the US, Sobarzo said, adding that the best way to deal with this challenge is to set up a direct presence in the country or find a strategic partner for local support.

Also speaking at the event, mining undersecretary Willy Kracht highlighted new export opportunities for Chilean suppliers related to climate change and the energy transition, including digital transformation, process automation, energy efficiency, safety and sustainability.