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With the world experiencing slumping commodities prices, mining in Chile has started to adjust to the new copper price forecast.
The average spot price of copper has fallen 19.8% this year on the London Metal Exchange compared with the 2014 average to US$2.61/lb, according to Chilean state copper commission Cochilco.
As a result, mining in Chile is not only expecting lower revenues from copper this year, but the country as a whole will see its coffers take a hit.
Sonami, the body that groups companies in the business of mining in Chile, has said that for every US cent the annual average price of copper falls, Chile's government loses US$60mn and the value of exports falls by US$128mn.
Additionally, rising power costs and fears over energy security in Chile are negatively impacting mining companies' investment decisions. Numerous power generation projects have been blocked or shelved, while copper miners' energy demands are set to double by 2025. The big firms are looking at their own power projects, which could help bridge the gap but mean more capital outlay for miners.
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