Our figure of the month 09/2019: Regional importance of the mining sector in Chile

On 18 September, Chile celebrates 209 years of independence from Spain. Chile is the first South American country which joined the OECD in 2010 and at the same time the economically strongest country in terms of nominal GDP per capita (2018). It exports about 30% (2018) of GDP, of which about 45% is copper exports.

Mining is the third largest sector in the Chilean economy with a share of about 10% (2018) of nominal GDP, including copper production with 90%. There are copper mines in seven regions, mainly in the north of Chile. Almost 50% of the copper is extracted in the largest open pit copper mine "Chuquicamata" in Antofagasta. The manufacturing industry and the energy sector are mainly located in the region around Santiago de Chile. They are economically important sectors with shares of around 40% respectively 24% of GDP (2017, nominal). The capital region is by far the economically strongest region and generates around 46% of Chile's GDP (2018, nominal).

Mining is economically most closely linked to manufacturing, which generates around 11% of Chile's GDP (2018, nominal): Approximately half of all intermediate consumption (55%; 2013) used by the mining sector comes from the manufacturing industry and almost half of the production of the mining sector (48%; 2013) is supplied to this sector. Due to the energy-intensive production, the energy sector is also an important supplier for the mining industry with 11%.

The following figures show the regional sales structures between the mining sector and the manufacturing industry as well as the regional purchasers’ structures between the energy and mining sectors. The mining sector has the closest sales structures with the regions Santiago de Chile (about 42%, left figure) and Valparaíso (about 13%). The main interdependencies between the energy and mining sectors are between Santiago de Chile with around 26% and the Biobío region with around 19% (right figure).

The effects of a change in copper demand would therefore become visible not only in the Antofagasta mining region but also in central Chile, in particular the regions around Santiago and Valparaíso due to the regional mining value chains.

Together with the Universidad Adolfo Ibañez in Viña del Mar, Chile, GWS is working on a BMBF research contract on the sustainability of copper mining in Chile, in which these economic dependencies are addressed. Further information can be found on the project webpage www.coforce.cl and at https://www.gws-os.com/de/index.php/wirtschaft-soziales/projekte/projektdetailseite/cu_cl.html.

Other figures can be found here.