Category: Chile

Record prices for copper, Chile’s top export, strong industrial production and investment drove Chile’s year-on-year GDP growth rate to 6.1% in November. Economists forecast growth will slow a little this year to 5.5% on weaker copper prices and higher interest rates to contain inflation. Consumer prices rose 3.7% last year, the highest in five years.

Chilean state-owned copper company Codelco said a walkout of service workers has not affected production. Maintenance, service, and construction employees stopped work after the government rejected demands for a $963 bonus per worker. Copper prices hit a new record as markets anticipated that unrest would disrupt production. Copper for March delivery rose 4.90 cents to $2.0975 per pound in New York.

Peru filed papers in Santiago to extradite former president Alberto Fujimori from Chile to face charges of corruption and human rights violations. Chilean police held Fujimori, 73, in November after he arrived in Santiago from five years exile in Japan. Chilean officials rejected Peru’s initial request to expel Fujimori and said instead they would await a court ruling on his case.

Contract workers at Chile’s state-owned Codelco, the world’s largest copper producer, have decided to go on strike demanding a one-off wage bonus from the government. The workers are keen to see a share of the windfall from this year’s record copper prices. Codelco uses around 28,000 contract workers and is dependent on them for many of its processes. Union officials say they expect around 6,000 workers to strike.

Chilean copper workers at Codelco, the world’s largest copper mine, yesterday, Wednesday, agreed to delay strike action to discuss a wage bonus with government officials. Workers are keen to see a share of the windfall from this year’s record copper prices.

ABN AMRO Chile has sold its life insurance business to local company EuroAmerica Seguros de Vida SA. The bank sold its portfolio of general insurance policies in November to local insurance firm Aseguradora Magallanes, owned by Nalac. This latest sale completes the Dutch bank’s exit from Chile’s insurance industry.

BBVA Chile, an affiliate of the Spanish bank, has issued local bonds worth $42 million (UF1.2 billion). The bonds are denominated in Unidades de Fomento, the Chilean inflation-linked currency unit. BBVA had originally planned to issue double that amount (UF2.7 billion). The instrument carries a maturity of 22 years and an interest rate of 5.17%.

Empresa Nacional de Electricidad SA (Endesa) is to build four hydroelectric plants in Chile between 2008 and 2018 to meet the country’s growing energy needs. The projects will cost $3.5-4 billion and will involve damming two rivers, something that has sparked conflict with environmentalists.

Chile’s central bank yesterday, Tuesday, kept its benchmark lending rate at 4.50% citing a calmer inflationary environment. This is the first time in five months the central bank has not raised interest rates. Inflation in the 12 months to November was 3.6%, down from 4.1% in October, driven by lower fuel prices and a stronger peso.

Michelle Bachelet and Sebastián Piñera will face each other in Chile’s second-round run-off presidential elections on 15 January. Bachelet, a former defense minister and ruling party candidate, gained just under 46% of the vote in Sunday’s elections, below the 50% which would have meant a first-round win. Her opponent, centre right Sebastián Piñera, representing the National Renewal Party, gained just over 25% of the votes. Should Bachelet win, she will become Chile’s first female president.