Category: Chile

Chile’s central bank said inflation will be 3 percent this year, above its previous forecast of 2.3 percent, as oil prices surge and domestic demand from business and consumers rises. The bank, which meets September 8 to decide whether to change its benchmark rate, reiterated the expectation that it will increase the rate gradually. Interest rates will rise to a “neutral” stance, in terms of economic stimulus, by August 2007, the bank said.

Spanish power company Endesa plans to invest $420 million in Chile over the next four years, 60 percent of the company’s total investments in Latin America. The company will invest $120 million in Argentina and $100 million in Colombia. Endesa is looking to increase the share of renewable energy in its total power generation capacity to 39 percent by 2009.

Public and private firms will invest $15.2 billion in copper and gold projects in Chile through 2008, about half of which will come from state-owned copper giant Codelco. The government predicts annual copper output will increase to 6.3 million tons by 2010, thanks mainly to higher production at Codelco, BHP Biliton and Antofagasta Minerals, a unit of Chilean holding group Luksic. Copper prices stand near record prices as global demand has soared in recent months.

Chile´s economy grew 6.5 percent year-on-year in the second quarter as the country benefited from record copper prices. The price of copper, which accounts for 6.3 percent of the Chilean economy, rose 3.1 percent in the quarter, helping boost the value of the country’s exports almost by a quarter. The economy was also helped by rising consumer demand, which was up 11.2 percent in the quarter.

Andronico Luksic, patriarch of the Luksic Group, which owns UK-listed copper miner Antofagasta, has died at the age of 78. Luksic retired from the board of the Chilean copper company in November 2004. He had been chairman since 1982 and was still honorary president at the time of his death. In 2004 Forbes magazine estimated the Luksic family´s net worth at $3.4 billion.

A New York Court ordered Bank of Chile’s New York office to give Chile’s State Defense Council CDE access to former dictator Augusto Pinochet’s financial records. Sources close to the case believe Pinochet may hold $27 million- $100 million offshore.

Chilean copper exports stood at $1.3 billion in July, up 12 percent year-on-year. The country exported $9.2 billion in copper in the seven months through July, a 15 percent increase. Chile is the world’s largest copper producer, with about 30 percent of global production.

Minera Escondida, a private Chilean mining company, posted a net profit of $937 million in the six months through June, an increase of 22 percent year-on-year. Escondida´s copper production dropped 3 percent in the second quarter but the firm has benefited from record high copper prices, fueled by strong demand from China. The company is controlled by Anglo-Australian mining company BHP Biliton.

Chile’s currency rose for a ninth straight session to 533.50 to the dollar as the price of copper, the country’s biggest export, hit record levels. The peso was also supported by last week’s decision by the central bank to raise its benchmark rate 25 basis points to 3.75 percent after inflation in July rose to a two-year high. Chile’s $94 billion economy, Latin America’s fifth-largest, grew 6.1 percent in 2004, the fastest since 1997, and Finance Minister Nicolas Eyzaguirre forecasts a 6 percent expansion this year.

Chile’s congress annulled constitutional provisions put in place by former dictator Augusto Pinochet that reserved seats in the senate for military officers and blocked the president from firing armed forces commanders. The number of Chilean senators will drop by 10 to 38 and the presidential term will be shortened from six to four years. Presidential elections are set for December, with Michelle Bachelet of the Socialist Party leading in the polls.