Category: Chile

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 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.

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.

Lucia Hiriart, the wife of former Chilean dictator Augusto Pinochet, and Marcos Antonio, Pinochet´s youngest son, were indicted as accomplices to income tax evasion and other charges brought against the ex-military leader. The two were charged with participating in the creation of false bank accounts in Chile and in foreign countries, theft and falsification of public documents and passports, and the acquisition of jewels and other luxury items with special “reserve” presidential funds. Augusto Pinochet, while continuing to deny wrongdoing, said that if laws were broken he alone should be held responsible.

The IMF released a report predicting Chile´s economy will expand a healthy 5.5-6.0 percent this year, helped by high copper prices, increased private investment and strong domestic consumption. The report went on to say that Chile needs better supervision of its insurance sector and should move toward introducing more competition among private investment firms managing pension funds.

Chilean consumer prices rose .6 percent in July as transportation costs jumped, adding to speculation the central bank will raise its benchmark lending rate for a sixth time this year when it meets next week. Inflation over the past 12 months quickened to 3.1 percent, the highest rate in two years. Rising fuel prices that made public transportation costlier and higher housing, health and food costs led the inflation pickup, according to a government report. Chile´s economy is surging as copper prices stand near record levels.