Chile

by James West on 8th Aug, 2008, 11:10:50 AM EST

The world’s number one producer of Copper is Chile, and there is no sign that 2009 will see any slowdown in activity. Copper is central to Chile’s economy and the country’s largest mines, such as those owned by state run copper company Codelco, pay some of the highest wages, averaging $40,000 a year.

Since it produces 10 percent of the world copper supply, prices are affected when events such as the strikes that are once again threatened, the copper price goes up on supply concerns.

This time, the miners are threatening to strike unless the government initiates discussion on nationalizing Chile’s resources. And three of the country’s most powerful unions are uniting to put pressure on the presidential candidates in the upcoming federal elections due in 2009.

The rhetoric is tactical however. Read more »

Malcolm Bucholtz B.Sc, MBA Analyst

Trading Note

Iodine - Little Talked About but Vitally Important

At The Market Traders we have a particular interest in the lesser known industrial type minerals. The next time you are in the Pharmacy section of your local Safeway or Albertson’s take a look on the shelf for Iodine. Stop for a moment and ask yourself where that Iodine came from. Would you be shocked to learn that it may have originated at a mine in a place like Chile?

Iodine is something that does not come up in everyday conversation in the office coffee room. But, it is an industrial product of vital importance. Aside from what you see in the pharmacy section, what else is Iodine used for? Well, how about as a contrast media in X-ray and MRI applications for one. In fact, this is the largest single application for Iodine taking about 20% of global production. Close behind is the area of biocides at 18%. Each time I brew a batch of home-made beer I sterilize my bottles with something called Iodophor which contains Iodine. Imagine how much of this stuff gets consumed by the big brewers at Coors and Miller as they sterilize millions of bottles every week? Other applications include human and animal nutrition, pharmaceuticals and even LCD computer and television screens.

Atacama Minerals – A Lundin Company

Atacama Minerals is a Canadian based company with a 100% interest in the Aguas Blancas iodine/sulphate/nitrate mine in northern Chile. Aguas Blancas has been in production since 2000 and Atacama has had 100% ownership of the project since 2005. One of the major shareholders in Atacama is the Lundin Group of Sweden. The mere mention of the Lundin name in mining circles is enough to make grown men tremble. Lucas Lundin is to be feared and revered for his business acumen. Read more »

Copper is the only metal with a Ph.D in Economics. Right now, Dr. Copper is telling us something very important.....

Copper is telling us that demand is going to outstrip supply going forward. In fact a quick look at www.kitcometals.com shows us that Copper inventories are on the decline. There are 2 dynamics at play here.

One dynamic is unfolding in Chile right now. Chilean power officials today admitted that the coming winter season that the southern Hemisphere is going into right now had better yield some rain and snow in the mountain areas. Come Spring, this rain and snow will melt and replenish the rivers thus enabling hydro-electric generating stations to run at full capacity. If there is a lack of moisture, Chile will have to resort to power rationing, much like what South Africa is doing right now. This will have a serious negative impact on the many operating Copper mines in Chile. Take note of how the South African power situation has affected Platinum prices of late and I think you will see my point. Read more »