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Spain’s Segura Says CNMV Needs Up to 20% Staff Boost

By Nathan Gill Oct. 30 (Bloomberg) -- Spain’s stock-market regulator needs an up to 20 percent staff increase to improve market supervision, the regulator’s chief said.
Spain will need to add personnel over the next three years to better regulate markets and fulfill its obligations with the European Union, Julio Segura, the president of Spain’s Comision Nacional del Mercado de Valores, said today in an interview in Santiago.
Heightened concern about insider trading cases and a new European commission designed to improve regulation of rating agencies means the agency, known as the CNMV, needs to boost its numbers, Segura said. The U.S. Securities and Exchange Commission also requested a similar increase, he said.
“There’s a greater sensibility to issues related to problems of privileged information simply because we are in a crisis situation,” Segura said in an interview outside a conference on rating agencies. “While there are no planned regulatory changes, what there is, is more emp…

Chilean Banks’ Combined Profit Rises 7% in September

By Nathan Gill Oct. 29 (Bloomberg) -- Chilean banks’ combined profit increased 7 percent in September from the previous month after demand for lending rose amid signs of an economic recovery.
Net income in the nine months through September was 849 billion pesos ($1.6 billion), Chile’s banking regulator, known as the SBIF, wrote in an e-mailed report today. It didn’t give the separate monthly figure. September profit was 110 billion pesos, according to Bloomberg calculations.
Consumer loans, mortgages and credit card lending rose 1 percent, while bad loan provisions fell 14 percent, the regulator wrote. The economy probably grew in September from a year earlier, President Michelle Bachelet said last night, according to newspaper El Mercurio. That’s in line with Banchile Inversiones’ projection that the worst recession in at least a decade ended in the third quarter.
“What we are seeing in September, and in the month before, is that lending in the system is beginning to grow,” German S…

Chile’s Soquimich Falls to Seven-Week Low on Earnings Decline

By Nathan Gill Oct. 28 (Bloomberg) -- Sociedad Quimica y Minera de Chile SA, Chile’s biggest fertilizer producer, tumbled to the lowest price in seven weeks after reporting a 57 percent drop in third-quarter profit.
The Santiago-based company, known as Soquimich, retreated 2 percent in Santiago trading to 19,470 pesos, the lowest since Sept. 7. The shares have fallen for seven straight days, losing 9 percent this month.
Net income fell to $82.3 million from $191 million a year earlier, Soquimich wrote in an e-mailed statement distributed after markets closed yesterday. Potassium-related fertilizer prices in the second half are down on first-half levels and average prices for all products probably will be lower, Chief Executive Officer Patricio Contesse wrote in the statement.
“China and India are the biggest consumers of potash so the prices they set become a reference for the market,” Juan Carlos Parra, an analyst at CorpResearch SA, said today in a telephone interview from Santiago…

Endesa Chile Earnings Increase 56% on Lower Costs

By Nathan Gill and James Attwood Oct. 28 (Bloomberg) -- Empresa Nacional de Electricidad SA, Chile’s biggest power generator, said third-quarter profit surged 56 percent after it lowered costs.
Net income rose to 178 billion pesos ($336 million) from 114 billion pesos a year earlier, the company known as Endesa Chile said today in a statement to the nation’s securities regulator. The company was expected to post profit of 164 billion pesos, the average estimate of six analysts surveyed by Bloomberg News.
Santiago-based Endesa Chile’s power-generating costs fell this year as it produced more from hydroelectric plants amid increased rainfall, offsetting lower prices, said Sergio Zapata, an analyst at Banchile Inversiones. The cost of fuel, transport and other supplies declined 13 percent, Endesa Chile reported.
“Chile operations were benefited by lower diesel costs” and higher reservoir water levels, Zapata said in a telephone interview today. He maintained his “buy” rating on the stoc…

Soquimich Profit Drops 57% on Lower Fertilizer Sales

By James Attwood and Nathan Gill Oct. 27 (Bloomberg) -- Sociedad Quimica y Minera de Chile SA, Chile’s biggest fertilizer producer, reported a 57 percent drop in third-quarter profit as lower prices dragged down sales.
Net income fell to $82.3 million from $191 million a year earlier, the Santiago-based company known as Soquimich wrote today in an e-mailed statement. The average estimate of four analysts surveyed by Bloomberg News was $77.6 million.
Operating income slumped to $110 million from $239 million and revenue slid to $384 million from $589 million. Potassium-related fertilizer prices in the second half are down on first-half levels and average prices for all products probably will be lower, Chief Executive Officer Patricio Contesse wrote in the statement.
“We believe that markets have bottomed out across all of our business lines and are beginning to turn around,” Contesse wrote. “The recovery process is slow and will most likely remain slow in the following year.”
Weak vol…

Velasco Says Chile Economic Recovery to Be ‘Vigorous’

By Nathan Gill Oct. 27 (Bloomberg) -- Chilean Finance Minister Andres Velasco said the country’s economy should have a “vigorous” recovery after it suffered its worst slump in at least a decade.
Forecasts for 2010 economic growth are improving and Chile’s labor market is recovering as consumption expands and demand for the country’s exports grows, Velasco said today in a speech in Santiago.
Chilean economists raised their 2010 economic growth forecast to 4.3 percent in a monthly central bank survey published Oct. 13, up from 3.6 percent a month earlier. Velasco has predicted Chile’s economy, South America’s fifth-largest, will grow 5 percent next year.
“There are good conditions today to predict a vigorous rebound,” Velasco said. “Signals of recovery in the labor market are auspicious, but we still have a long way to go.”
Chile’s economy shrank in the first two quarters of this year and unemployment hit a five-year high after prices for exports plunged, led by copper, and domestic de…

Lan Profit Falls 37% on Lower Sales, Fuel Hedge Loss

By Nathan Gill and James Attwood Oct. 26 (Bloomberg) -- Lan Airlines SA, Latin America’s biggest air carrier by market value, reported a 37 percent drop in third-quarter profit on lower sales and a fuel hedge loss.
Net income fell to $52.1 million from $83 million a year earlier, the Santiago-based airline wrote in a statement distributed today by PRNewswire. Profit was in line with the $52.8 million average estimate of five analysts surveyed by Bloomberg News.
Revenue slumped 19 percent on lower yields in both the cargo and passenger businesses, partially offset by a 14 percent fall in operating expenses on lower fuel costs, it wrote. A fuel hedging loss of $14.4 million compared with a gain of $29.2 million in the same period a year earlier.
Ticket prices declined as a 42 percent slide in average oil prices lowered fuel surcharges, while cargo traffic slumped, Bice Inversiones wrote in an Oct. 23 note to clients.

Celfin Capital to Start Chile Carbon Credit Exchange

By Nathan Gill Oct. 26 (Bloomberg) -- Celfin Capital SA, a Santiago, Chile-based brokerage and investment bank, announced plans to create a carbon trading exchange in the country.
The Santiago Climate Exchange is a joint venture with Fundacion Chile, a government-sponsored entity promoting technological innovation, to encourage voluntary carbon reduction projects, Celfin Chairman Juan Andres Camus told reporters in Santiago today.
Chile, South America’s fifth-largest economy, may produce as much as 150 million metric tons of greenhouse gases by 2020, up from about 50 million tons in 2005, the brokerage said in a statement. Trading on the exchange should begin by the end of next year, Camus said.
“All the biggest companies in Chile will face the challenge of their carbon footprint,” said Camus, whose company oversees about $6 billion in assets. “This exchange should strengthen demand for carbon credits.”

BHP Spence Copper Workers End Chile Wage Negotiations

By Matt Craze and Nathan Gill Oct. 26 (Bloomberg) -- BHP Billiton Ltd. workers at the company’s Spence copper mine in Chile broke off wage talks with management, according to a union official.
Workers at the mine, who began the 14th day of a strike today, will stage protests after government-mediated talks failed, union President Andres Ramirez said, without revealing the location of the event.
The wage offer from BHP, the world’s largest mining company, made in an Oct. 23 meeting was insufficient, Ramirez said in a telephone interview. Talks broke down over the weekend, he said, without providing further information.
Workers are demanding a 5 percent pay increase and benefits similar to those offered to workers at BHP’s Escondida, the world’s largest copper mine, said Pedro Marin, president of Chile’s Mining Federation. Strikers may disrupt Spence mine operations by blocking roads to halt copper shipments if the company doesn’t listen to workers’ demands, he said.
“This week is cruc…

Banco de Chile Rises on Goldman Sachs Upgrade

By Nathan Gill Oct. 23 (Bloomberg) -- Banco de Chile, the country’s second-biggest lender, rose in Santiago trading after Goldman Sachs Group Inc. upgraded the shares.
Santiago-based Banco de Chile gained 0.5 percent to 42.7, paring a weekly loss of 0.4 percent. SM-Chile SA, the bank’s holding company, jumped 6.8 percent to its highest price on record. 
Goldman Sachs upgraded Banco de Chile to “neutral” from “sell,” citing the shares underperformance compared with regional peers and an improved economic outlook. The shares have gained 32 percent this year, compared with the Ipsa’s 44 percent advance. Chile’s Finance Minister Andres Velasco said today the country’s recovery may be “vigorous.”
“Having lagged other banks under coverage in recent months, Banco de Chile now has 10 percent upside to our 12-month target,” Goldman Sachs wrote. “We also are factoring in stronger GDP growth in some countries.”

Banco Monex in Talks to Sell Operations to Consorcio

By Nathan Gill Oct. 22 (Bloomberg) -- Consorcio Financiero SA, a Santiago-based financial services provider, is negotiating the purchase of Chile’s Banco Monex, a bank spokeswoman said.
Monex is holding talks with Consorcio about the possible sale of its operations, Claudia Valenzuela said today in a telephone interview from Santiago, confirming an unsourced Diario Financiero newspaper article. No one at Consorcio answered telephone calls seeking comment.
“They are in negotiations,” Valenzuela said. “There is nothing official yet.” When this operation is completed, we will send a statement.”
Net profit for Santiago-based Monex rose 12.9 percent to 509 million pesos ($949,000) in 2008, according to a statement posted on the Web site of Chile’s banking regulator. The bank had one branch and 66 employees at the end of last year, the statement said.
Consorcio, which provides insurance and brokerage services, has completed due diligence on the bank and the two companies may be ready to si…

La Polar Rises Most in Ipsa on Prospect for Recovery

By Nathan Gill Oct. 21 (Bloomberg) -- Empresas La Polar SA had the biggest gain in Chile’s Ipsa Index after analysts said the fourth-largest retailer by market value will benefit from a recovery in spending.
Santiago-based La Polar climbed 4 percent to 2,870 pesos, its highest price since January 2008. The shares have more than doubled this year.
La Polar may rise to 3,400 pesos in 12 months, Inversiones Security analyst Paulina Rojas wrote in a note yesterday, compared with a previous estimate of 2,400 pesos. Earnings before interest, tax, depreciation and amortization probably will return to last year’s levels as spending rebounds next year and may grow an average 8 percent in the next decade, she wrote.
“La Polar has ample potential for growth,” Rojas wrote, reiterating a “buy” rating. “We see the reactivation of their expansion plan as positive and opportune.”
The company plans to open six new stores in Chile by 2012 and expand into Colombia by the end of next year, Rojas wrote.

BHP Spence Workers Warn of ‘Long’ Strike Over Pay

By Matt Craze and Nathan Gill Oct. 21 (Bloomberg) -- BHP Billiton Ltd. workers at the Spence copper mine in northern Chile are prepared to go on strike for a “long time” unless the company improves its wage and benefits offer, a union official said.
Spence workers are seeking similar terms to BHP workers at the Escondida copper mine, also in northern Chile, Daniel Ibacache, a spokesman for the union representing the workers, said yesterday in an interview from a tent where striking workers had set up camp outside the mine in the Atacama Desert.
Melbourne-based BHP offered Escondida workers a bonus of 14 million pesos ($25,718) to agree on a new labor contract before a Dec. 5 deadline, more than the 8.5 million pesos offered to Spence employees, Ibacache said. Spence workers are in the ninth day of a strike today, BHP spokesman Ruban Yogarajah said in a telephone interview.
“We are willing to resist for a very long time,” Ibacache said. “BHP has one set of criteria for Escondida and a…

Chile to Pause for ‘Prolonged Time,’ De Gregorio Says

By Nathan Gill Oct. 20 (Bloomberg) -- Chilean central bank President Jose De Gregorio said policy makers will keep the overnight lending rate at its record low for a “prolonged time.”
De Gregorio has said he plans to hold borrowing costs down in an effort to stoke economic expansion faster than 4.5 percent, which would likely push inflation back up toward policy makers’ 3 percent target. Prices fell 1.1 percent in the 12 months through September, the steepest decline since the 1930s.
Consumer prices have fallen for two consecutive months on an annual basis, reinforcing the bank’s forecast that interest rates won’t need to be raised until the second quarter of 2010, De Gregorio said today at a conference in Santiago.
“Indicators such as demand, production and expectations show an outlook that is coherent with the recovery in economic activity forecast for the current half,” De Gregorio said. “It’s expected that as of the second quarter next year, rates will begin to rise gradually and…

BHP Says Spence Output Continues at ‘Reduced Rate’

By Nathan Gill Oct. 20 (Bloomberg) -- BHP Billiton Ltd., the world’s biggest mining company, said copper production at its Spence mine in northern Chile continues at a “reduced rate” as a strike by workers enters an eighth day, an official said.
BHP declined to specify the current production rate, according to Ruban Yogarajah, a company spokesman in London.
Unionized miners at Spence, near the northern city of Calama, walked out Oct. 13 after rejecting a wage offer that was less than what workers received at BHP’s Escondida, the world’s largest copper mine.
Escondida miners won a one-time bonus worth 14 million pesos ($25,730) and a pay increase of 5 percent a year over five years, Santiago-based newspaper La Tercera reported Oct. 11, without saying how it got the information.
Melbourne-based BHP produced 172,685 metric tons of copper at Spence in the 12 months through June 30 and plans to reach full capacity of 200,000 tons in the coming year, the company said Sept. 14.
Yogarajah, s…

Cencosud Installs Team in Costanera Center Site to Study Restart

By Nathan Gill Oct. 19 (Bloomberg) -- Cencosud SA, Chile’s biggest retailer by sales, moved personnel into its Costanera Center site to evaluate resuming construction of the Santiago office tower and shopping center project.
“Cencosud has been continually studying the financial and economic conditions, both national and international, to decide the right time to reactivate the project,” it wrote in a statement posted today on the regulator’s Web site.
The Santiago-based company was responding to a request for information from the regulator following an Oct. 16 article in Chile’s El Mercurio newspaper.

Strike at BHP’s Spence Mine in Chile Enters 5th Day

By Nathan Gill Oct. 17 (Bloomberg) -- BHP Billiton Ltd., the world’s biggest mining company, said a strike at the company’s Spence copper mine in Chile entered a fifth day.
Copper output at the Melbourne-based company’s 200,000-ton-a-year mine continued at a slower rate, spokesman Ruban Yogarajah said today in a telephone interview from London.
Unionized workers at Spence, near the northern city of Calama, walked out Oct. 13 after rejecting a wage offer. Yogarajah wouldn’t comment on ongoing negotiations.
Melbourne-based BHP produced 172,685 tons of copper at Spence in the 12 months through June 30 and plans to reach full capacity of 200,000 tons in the coming year, the company said Sept. 14.

BHP’s Spence Mine Copper Producing at ‘Slower Rate’

By Nathan Gill Oct. 16 (Bloomberg) -- BHP Billiton Ltd., the world’s biggest mining company, said copper output at its 200,000-ton-a-year Spence mine in Chile continues at a “slower rate” as a strike by workers entered a fourth day.
Production was “the same as yesterday,” spokesman Mauro Valdes responded by text message to questions from Bloomberg News today, without elaborating. Spence produced about 100 metric tons of refined copper yesterday, compared with a normal average of 700 tons, Spence union president Andres Ramirez said yesterday in a telephone interview.
Unionized workers at Spence, near the northern city of Calama, walked out on Oct. 13 after rejecting a wage offer. Melbourne-based BHP produced 172,685 tons of copper at Spence in the 12 months through June 30 and plans to reach full capacity of 200,000 tons in the coming year, the company said Sept. 14.
Copper futures for December delivery declined 1.35 cents, or 0.5 percent, to $2.8455 a pound on the New York Mercantile…

Chile’s Fit Research Buys Santiago Exchange Seat

By Nathan Gill Oct. 15 (Bloomberg) -- Chilean brokerage Fit Research Corredores de Bolsa SA bought a seat in the Santiago securities exchange in an auction today.
Fit, the only bidder, offered the minimum price of 2 billion pesos ($3.7 million) for a share in the exchange, the auctioneer announced. This gives the company the right to trade in Chile’s Bolsa de Comercio de Santiago.
The share auction was Chile’s second this year, an official, who can’t be named because of stock exchange policy, said today by telephone. The Angelini Group, which controls Empresas Copec SA, the country’s largest publicly traded company by market value, bought a share for 1.6 billion pesos in May, the official said. There are 31 brokerages trading on the Santiago exchange, according to the official.
Chile’s Ipsa stock index is trading at near-record levels after rallying about 65 percent from last October’s low. It fell today 0.8 percent to 3,437.02.

BHP to Stop Copper Output at Spence Mine, Union Says

By Nathan Gill and Matthew Craze Oct. 15 (Bloomberg) -- BHP Billiton Ltd. will cease production of refined copper tomorrow at its 200,000-ton-a-year Spence copper mine in Chile because of a strike, a union leader said.
Workers stopped mining on Oct. 13, leaving BHP without enough raw materials to be turned into refined copper, union president Andres Ramirez said today in a telephone interview.
Workers at Spence rejected an Oct. 12 wage proposal that was less than what miners received at BHP’s Escondida, the world’s largest copper mine. Escondida workers won a one-time bonus worth 14 million pesos ($25,410) and a pay increase of 5 percent a year over five years, Santiago newspaper La Tercera reported Oct. 11, without saying how it got the information.
“Refined copper production is going to collapse,” Ramirez said. “By tomorrow they won’t be producing anything.”
Ruban Yogarajah, a BHP spokesman based in London, said refined copper production continues at a “reduced rate” at the mine. H…

Chile Invokes Anti-Terror Law to Quell Violence, Rosende Says

By Nathan Gill Oct. 14 (Bloomberg) -- Chile will use an anti-terrorism law criticized by human rights groups to try and quell a spate of violence over indigenous lands in the country’s south, a government official said.
The government will apply the law, dating from the military dictatorship, against those responsible for armed attacks against trucks and light vehicles in the southern Araucania region, Patricio Rosende, the deputy interior minister, said in a statement on the Interior Ministry’s Web site.
The United Nations and Human Rights Watch have criticized use of the law against Chile’s indigenous minorities on concern that it gives the government powers it doesn’t have in regular criminal proceedings and limits access to lawyers by the accused.
Groups claiming to be part of Chile’s Mapuche indigenous community have seized private property and obstructed highways to protest the loss of land they claim belonged to their ancestors. In August, police killed a 24-year-old man durin…

Endesa Chile Rises to Four-Week High on Edegel Stake

By Nathan Gill Oct. 13 (Bloomberg) -- Empresa Nacional de Electricidad SA, Chile’s biggest power generator, rose the most in almost four weeks after boosting its stake in a Peruvian unit at an “attractive” price.
Endesa, as the company is known, gained 1.3 percent to 868 pesos in Santiago trading, its biggest advance since Sept. 16.
Santiago-based Endesa bought 29.3 percent of Edegel SA, a Lima-based electricity producer, for 1.61 soles per share, or $375 million, the company said in a statement posted on Chile’s securities regulator’s Web site after markets closed on Oct. 9. Santiago trading was closed yesterday for a holiday.
“This should have a positive effect on shares,” Alvaro Pipino, head of research at brokerage IM Trust, said today in a telephone interview from Santiago. “When you look at the numbers of what they are paying for installed megawatts, it’s quite attractive.”
Endesa now owns a 62.4 percent stake in Edegel, the statement said. Edegel was unchanged in Lima trading …

Copec Rises to Highest Since 2008 on Celfin Rating

By Nathan Gill Oct. 13 (Bloomberg) -- Empresas Copec SA, Chile’s largest producer of wood pulp, climbed to the highest since May 2008 after Celfin Capital SA recommended investors buy the shares.
Copec, the South American country’s largest publicly traded company, advanced 1.6 percent to 7,615 pesos in Santiago trading, its highest price since May 2008.
Celfin, a Chilean brokerage, gave the Santiago-based pulp producer a “buy” rating in new coverage, citing its “strong growth” outlook and higher pulp prices, Cesar Perez, a managing director, wrote today in an e-mailed note to clients.
Copec is “poised to deliver strong growth in coming years, on factors including better pricing, higher volumes and new projects,” Perez said. “It may well engage in acquisitions in the region, in both forestry and energy, including further integration with its main raw material -- acquisition of forests.”
The BHKP global pulp price index advanced to the highest since December while the NBSK gauge climbe…

Chile’s Peso Slumps Most in Week as Prices for Copper Decline

By Nathan Gill Oct. 9 (Bloomberg) -- Chile’s peso dropped the most in a week as prices for copper, the country’s biggest export, slumped on a strengthening dollar.
The peso weakened 0.6 percent to 554.50 per U.S. dollar from 551 yesterday for its steepest drop since Oct. 2. It declined for a third week.
Copper dropped in New York and London, paring its biggest weekly gain in two months, as the rising dollar cooled demand for the metal as a hedge against inflation. Chile is the world’s largest copper producer. The December futures contract slid 6.05 cents, or 2.1 percent, to $2.838 a pound on the New York Mercantile Exchange’s Comex unit.
“Copper is one of the most important variables for the movement of the Chilean peso,” said Ricardo Gomez, head of fixed-income sales and trading at Larrain Vial SA in Santiago. “Today it fell strongly.”
The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, rose 1.7 percent to 2.76 percent…

Empresas CMPC Falls Most in Two Weeks on Planned Equity Sale

By Nathan Gill Oct. 9 (Bloomberg) -- Empresas CMPC SA, Chile’s second-biggest pulp producer by market value, fell the most in two weeks after the company said it would offer $500 million in new shares.
CMPC, owned by Chile’s billionaire Matte family, dropped 1.3 percent to 19,400 pesos in Santiago trading at 1:34 p.m. New York time and earlier fell 3.3 percent for the biggest intraday drop since September 25.
Shareholders in the Santiago-based company approved the sale of 20 million new shares at 13,800 pesos each, or $500 million, the company wrote today in a statement posted on the Web site of Chile’s securities regulator. CMPC said yesterday it will purchase a pulp unit in southern Brazil from Fibria for $1.43 billion.
“Today’s fall is a typical fall happening after the announcement about share prices,” Hernan Guerrero, an analyst at FIT Research Corredores de Bolsa SA in Santiago, said today in a telephone interview from Santiago. “This should pass pretty quickly.”

Codelco Won’t Sell Bonds This Year, May Start in 2010

By Nathan Gill Oct. 8 (Bloomberg) -- Codelco, the world’s largest copper producer, said it won’t tap bond markets this year after Congress approved a bill to provide $1 billion in financing.
Codelco may look to sell bonds from next year, Chief Executive Officer Jose Pablo Arellano told reporters today in Santiago. The company will begin to spend the cash when the bill is signed into law, “probably in November,” he said.
Codelco spent $2 billion on its operations last year in a bid to stem five years of declining production. The company, which supplies about a 10th of the world’s mined copper, is investing another $2 billion on developing mines this year.
“We have quite an important investment plan for the next few years,” Arellano said at company headquarters in Santiago. “For that, we will turn to different forms of financing, bonds, different sorts of financing.”

Chile’s Antofagasta Port Ends Strike, Restarts Copper Shipments

By Nathan Gill Oct. 7 (Bloomberg) -- Copper shipments from northern Chile’s Antofagasta port restarted today after two weeks of delays caused by a labor strike, the port’s operator said.
The 14-day strike ended last night, Tamara Rebolledo, a spokeswoman for Antofagasta Terminal Internacional SA, said today in a telephone interview.
The strike affected some shipments by Xstrata Plc, the world’s fourth-largest copper supplier, the company said Oct. 2. An Xstrata spokeswoman didn’t return phone messages or answer an e-mail seeking comment today.

Chile Reduces Estimate for This Year’s Budget Deficit

By Sebastian Boyd and Nathan Gill Oct. 7 (Bloomberg) -- Chile’s budget deficit will be smaller this year than earlier forecast as rising copper prices trimmed the projected shortfall in tax revenue.
This year’s budget deficit will be about 3.6 percent of gross domestic product as government income falls 22 percent short of initial projections, budget director Alberto Arenas told lawmakers today in Valparaiso. The government in June forecast a gap of 4.1 percent and a tax shortfall of 24 percent.
The outlook for Chile’s public finances is improving on the back of higher-than-forecast copper prices and early signs of economic recovery. Gross domestic product will probably shrink 1.6 percent this year, Arenas said, a number at the optimistic end of the central bank’s 1.5 percent to 2 percent September forecast.
“We’re estimating a deficit for this year of 3.1 trillion pesos, around 3.6 percent of GDP,” Arenas said. “Last June, we estimated a deficit of 4.1 percent of GDP, so what we’re …

BHP Union Agrees to Delay Strike, Extend Wage Talks

By Nathan Gill and James Attwood Oct. 7 (Bloomberg) -- Workers at BHP Billiton Ltd.’s Spence copper mine in Chile agreed to delay a strike and extend wage negotiations to give the company time to sweeten a contract offer, a union official said.
Workers, who had planned a strike starting tomorrow, will now walk out on Oct. 13 should Melbourne-based BHP refuse to improve its latest offer, said Francisco Aravena, a spokesman for the union representing about 560 workers at Spence. BHP is the world’s biggest mining company.
“This is, more than anything, us waiting for the company to deliver a substantial offer with respect to our collective contract,” Aravena said today in a telephone interview. “The conversations we’ve had haven’t been fruitful.”
Workers rejected an offer last week, prompting BHP to improve its wage proposal Oct. 5, BHP spokesman Ruban Yogarajah said today by telephone from London.
Copper futures for December delivery fell 0.2 cent to $2.7795 a pound on the Comex divisio…

BHP Workers at Spence Reject Pay Offer, Union Says

By James Attwood and Nathan Gill Oct. 6 (Bloomberg) -- Workers at BHP Billiton Ltd.’s Spence copper mine in Chile may strike as soon as Oct. 8 after a labor union rejected an increased pay offer, a union official said.
“The strike is almost imminent unless there’s a last minute miracle,” Pedro Marin, president of Chile’s Mining Federation, which represents a total of 8,500 miners in the South American country, said today in a telephone interview. BHP hasn’t increased its offer “in the way that workers hoped for,” he said.
Melbourne-based BHP, the world’s biggest mining company, requested a five-day extension to talks stipulated by Chilean law after workers in the Spence mine union rejected its previous offer. The five-day period ends tomorrow, allowing a strike to begin on Oct. 8, Marin said. Mauro Valdes, a spokesman for BHP’s Chile unit, didn’t answer calls after normal business hours.
BHP earned a record $15.4 billion in 2008. The company said Aug. 12 fiscal second-half profit dec…

Chile Senate Approves $1 Billion Funding for Codelco

By Nathan Gill and Sebastian Boyd Oct. 6 (Bloomberg) -- Chile’s Senate approved a bill to provide $1 billion in financing for Codelco, the world’s largest copper producer.
The vote was 21-to-six with one abstention in the Senate, which acted after the lower house passed the bill earlier today, according to a statement on the Senate Web site. Chilean President Michelle Bachelet must sign the bill for it to become law.
The financing is part of a corporate governance law that aims to improve transparency and efficiency at the state-owned company. The new law would bring Codelco under the supervision of Chile’s securities regulator and removes ministers from its board, according to a copy of the law posted on the lower house of Congress’s Web site.
Codelco is investing $11 billion to revamp aging mines and boost output after strikes and other interruptions curbed production in 2008. The company owns almost a fifth of the world’s copper reserves.

Codelco’s Andina Workers Reject Pay Offer, Union Says

By Nathan Gill Oct. 5 (Bloomberg) -- Workers at the Andina unit of Chile’s Codelco, the world’s largest copper producer, voted to reject a preliminary wage offer from the company, a union leader said.
About 70 percent of the 1,140 unionized workers in a Sept. 30 vote rejected the offer for a 3 percent pay increase plus an attendance-based bonus, Cristian Munoz, treasurer of the Andina union, said in a telephone interview today. Company and union representatives will resume negotiations Oct. 15, Munoz said.
Codelco is investing $11 billion to revamp aging mines and boost output after strikes and other interruptions curbed production in 2008. Andina, located 80 kilometers (50 miles) north of Santiago, produces about 218,000 metric tons of copper a year and about 2,500 tons of molybdenum, according to the company’s Web site.
Codelco doesn’t comment on salary negotiations, said a spokeswoman who can’t be named because of company policy.

Chile's Soquimich Falls Most Since June on Lithium Price Cuts

By Nathan Gill Oct. 1 (Bloomberg) -- Sociedad Quimica y Minera de Chile SA, the world’s largest lithium producer, led declines on Santiago’s Ipsa Index after announcing price cuts for the metal used in batteries.
Soquimich, as the company is known, fell 3.6 percent to 20,630 pesos, the steepest decline since June 22. The Ipsa retreated 0.6 percent after four days of gains.

The Santiago-based company said yesterday it will reduce lithium carbonate and lithium hydroxide prices by about 20 percent for the renewal of all supply contracts to accelerate demand recovery.

“We expect the news to lightly pressure shares down because of its negative impact on Ebitda in the short term,” BICE Inversiones wrote in a note to clients today. “This will be compensated in the mid-term by the increase in the company’s market share and a sooner-than-expected recovery in demand.”

BHP Spence Workers Reject Pay Offer, Approve Strike

By James Attwood and Nathan Gill Oct. 1 (Bloomberg) -- BHP Billiton Ltd. workers at the Spence copper mine in Chile voted in favor of a strike, rejecting a pay offer by the company, a union official said.
Workers in the Spence mine union voted 525 to 1 late yesterday against BHP’s offer, Pedro Marin, president of Chile’s Mining Federation, which represents 8,500 miners, said today in a telephone interview. A unit of Melbourne-based BHP, the world’s biggest mining company, will request a five-day extension to talks stipulated by Chilean law, Ruban Yogarajah, a company spokesman, said today in an e-mailed statement.
Workers are seeking a 5 percent pay raise plus bonuses while the company is offering 2 percent, according to Marin. BHP earned a record $15.4 billion in 2008. The company said Aug. 12 fiscal second-half profit declined 65 percent to $3.26 billion after the recession curbed prices and metals demand.

“There are still opportunities to reach an agreement through dialogue,” Marin s…

Chile Copper Output Rises 7.8% on Codelco, BHP Mines

By Nathan Gill Sept. 30 (Bloomberg) -- Copper output in Chile, the world’s biggest producer, rose 7.8 percent in August from a year earlier after state-owned Codelco and BHP Billiton Ltd. boosted production, the government said.
Output increased to 459,823 metric tons from 426,689 tons a year earlier, the country’s national statistics agency said in a statement distributed in Santiago today.
Copper prices have doubled this year as demand for the metal used to make wires and pipes rose in China, the biggest importer of the commodity. The metal advanced the most in more than a month in New York after manufacturing reports for China and Japan signaled increased demand.
Futures for December delivery climbed 3.3 percent to $2.819 a pound on the New York Mercantile Exchange’s Comex division, its steepest gain since Aug. 21.

Codelco, based in Santiago, is the world’s biggest copper producer. Melbourne-based BHP, the largest mining company, owns 57.5 percent of Chile’s Escondida, the world’s big…

Molymet Says Chile Plant Operations Normal After Fire

By James Attwood and Nathan Gill Sept. 30 (Bloomberg) -- Molibdenos y Metales SA, the world’s largest molybdenum processor, said a plant near Santiago is operating normally after a fire broke out this morning.
Industrial installations at the San Bernardo plant weren’t damaged and no one was injured in the blaze, the Santiago-based company, known as Molymet, said today in an e-mailed statement.
The cause of the fire, which broke out at 4:30 a.m. local time, isn’t known, Molymet said. Chile’s emergency service, known as Onemi, said in a statement on its Web site that the blaze may have been caused by paraffin.

Molymet was unchanged at 7,501 pesos in Santiago trading at 11:37 a.m. New York time.

U.S. Needs to Open Up Trade Relations With Cuba, Locke Says

By Nathan Gill Sept. 29 (Bloomberg) -- The U.S. needs to open up trade relations with Cuba, said U.S. Secretary of Commerce Gary Locke.
President Barack Obama believes the U.S. needs to “open up our trade relations and our exchange of people and travel and that many of the restrictions with Cuba need to be lifted,” Locke told reporters today in Santiago, Chile.

Dell’s Peixoto Sees ‘Huge’ Growth Potential in Latin America

By Nathan Gill Sept. 28 (Bloomberg) -- Dell Inc., the world’s second-biggest maker of personal computers, sees “huge” prospects for growth in Latin America, where the company is looking to provide technology to Brazil’s oil industry.
“Growth potential is huge in Latin America and Brazil,” Raymundo Peixoto, Dell’s manager for Brazil, said today in an interview at a conference in Santiago, Chile.

Dell sees potential to do research and provide solutions to Brazil’s oil industry, which is “growing like crazy,” he said.

Antofagasta Seeks Funds to Expand Biggest Copper Mine

By Matt Craze and Nathan Gill Sept. 28 (Bloomberg) -- Antofagasta Plc, which is planning a $1 billion expansion of its biggest copper mine, will seek financing by year-end for the project in Chile, Chairman Jean-Paul Luksic said.
“We are looking for financing with banks overseas, and it most probably won’t be through bonds, it will be financing through credit,” billionaire Luksic, whose family controls 63 percent of the company, told reporters today in Santiago.
Antofagasta will spend $1 billion to expand Los Pelambres, its biggest copper mine, and $2.2 billion on its Esperanza project, also in Chile, according to the company’s Web site. Antofagasta said it will boost its copper output 60 percent by 2011.
Luksic said Asian nations’ demand for copper used in power cables and electric wire will continue to grow and the world may exit a recession by 2011. Demand for copper will be “volatile” next year, he said.
Copper futures for December delivery fell 0.5 percent to $2.727 a pound on the C…

Colombian Peso Rises for Fourth Straight Week on Economy

By Nathan Gill Sept. 25 (Bloomberg) -- Colombia’s peso climbed for a fourth week on speculation the South American country is beginning to recover from its first recession since 1998.
The peso climbed 1.3 percent this week to 1924.45 per dollar, extending its advance this month to 7 percent, the biggest gain among 26 emerging-market currencies. It rose 0.2 percent on the day from 1927.82 yesterday. The peso is up 4.9 for the month, the best performer against the dollar among six major Latin American currencies tracked by Bloomberg.
The economy will expand 1 percent in the second half of 2009, rebounding from contractions in the first two quarters, Finance Minister Oscar Ivan Zuluaga said yesterday. Juan Mauricio Ramirez, Colombia’s acting national planning director, said yesterday the economy will expand 0.5 percent to 1.5 percent this year, matching previous forecasts.
“Expectations in the country’s economy are positive,” Juan Pablo Vieira, a currency trader at Interbolsa SA in Bogota,…

Chilean Bank Quadruples Its Contribution to IMF Fund

By Nathan Gill Sept. 24 (Bloomberg) -- Chile’s central bank said it quadrupled the amount of special drawing rights it is prepared to lend to the International Monetary Fund.
Chile, the only Latin American country participating in the IMF’s emergency credit line known as the New Arrangements to Borrow, increased the amount of rights, an accounting unit based on a basket of currencies, to 1.36 billion ($2.16 billion) from 340 million, the bank said today in an e-mailed statement.
“I welcome the Chilean authorities’ commitment to increase fourfold its contribution,” IMF Managing Director Dominique Strauss-Kahn said today in a statement posted on the IMF’s Web site. “This will help ensure the IMF’s lending capacity is sufficient to meet the financing needs of its member countries and demonstrates Chile’s commitment to multilateral cooperation.”

Chile’s central bank had about $25 billion in international reserves at the end of August, according to data posted on the bank’s Web site.

Chile’s Vapores Climbs Most in Five Weeks as S&P Removes CreditWatch

By Nathan Gill Sept. 23 (Bloomberg) -- Cia. Sudamericana de Vapores SA, Latin America’s largest container ship operator, rose the most in five weeks in Santiago trading after Standard & Poor’s said the company’s financial flexibility has improved.
Valparaiso, Chile-based Vapores climbed 4.6 percent to 430 pesos at 1:42 p.m. New York time, its biggest intraday gain since Aug. 14. The shares have increased 3.6 percent this year, trailing a 40 percent rally in the benchmark Ipsa index.
S&P’s affirmed the company’s B- credit rating yesterday and removed it from CreditWatch, citing increased liquidity and “successful” negotiations with shipyards, according to a statement on the rating company’s newswire.
“The rating action reflects our views on the company’s recent actions, which we believe have strengthened the company’s financial flexibility and liquidity position, and have alleviated some of the pressure that depressed market conditions have put on the container ship industry,” wr…

Peruvian Economy Has Reached ‘Point of Inflexion,’ Central Bank President Says

By Nathan Gill Sept. 18 (Bloomberg) -- Peruvian central bank President Julio Velarde said the country’s economy has reached a “point of inflexion” after it shrank the most in eight years in June.
Rebounding demand in Peru and overseas will probably push the economy to 3.2 percent growth in the second half of 2009, and 1.8 percent growth for 2009 overall, Velarde said during a presentation at the central bank in Lima.
The government is implementing a $3 billion stimulus plan while the central bank has cut its benchmark lending rate to a record 1.25 percent to help revive demand in South America’s sixth-biggest economy.
Peru’s economy contracted 1.4 percent in July from the same month a year earlier, after a 2.1 percent year-on-year decline in June, as demand for the South American country’s fishing, manufacturing and metal exports fell, the government statistics agency said Sept 15.
Velarde said the bank forecasts that consumer prices will rise 0.4 percent to 0.5 percent in 2009, adding t…

Gold Fields Halts Peru Exploration Project on Protest

By Nathan Gill Sept. 18 (Bloomberg) -- Gold Fields Ltd. and Cia. de Minas Buenaventura SA halted exploration of their Titan-Arabe gold and copper deposit in northern Peru after protests by local residents turned deadly, the head of the joint venture said.
“We saw that there were constant threats, so we took the decision to halt operations,” said Rocio Gordillo, the chief executive officer of Consolidada de Hualgayoc, the joint venture between Johannesburg-based Gold Fields and Lima-based Buenaventura, Peru’s biggest precious- metals producer.
The protesters are concerned that the operation may pollute water supplies. Hualgayoc has all the necessary government permits and received permission from nearby communities before beginning operations, Gordillo said in an interview late yesterday from Cajamarca, Peru.
Gordillo declined to say when Hualgayoc will restart operations in the Cajamarca region, which began on Aug. 1. Gold Fields and Buenaventura each own half of the venture.
“There is i…

Peru Buenaventura Rises on Gold Rally, La Zanja Mine

By Nathan Gill Sept. 16 (Bloomberg) -- Cia. de Minas Buenaventura SA, Peru’s biggest precious-metals miner, rose to its highest in more than a year in Lima trading on a rally in gold prices and the outlook for its La Zanja mine.
The Lima-based gold and silver miner advanced for a second day, gaining 7.3 percent to $33.81, the highest price since June 2008.
Gold rallied, extending gains and approaching a record, on concerns a global economic recovery may stoke inflation, boosting demand for the metal as an alternative investment to the dollar. Silver rose to a 13-month high.
“People are investing in stocks like Buenaventura because they hope that the price of gold will continue an upward trend,” Rodrigo Zuazo, an analyst with Centura SAB in Lima, said today in a telephone interview. “Buenaventura is positioned to continue showing favorable results” as new projects like La Zanja begin operations next year.
Exploration for gold at the company’s Chucapaca mine has “good long-term prospects,”…

Peru’s Economy Shrank 1.4% in July From Year Earlier

By Nathan Gill Sept. 15 (Bloomberg) -- Peru’s economy contracted for a second month as demand for the South American country’s fishing, manufacturing and metal exports fell.
Gross domestic product fell 1.4 percent in July from the same month a year earlier, after a 2.1 percent year-on-year decline in June, the government statistics agency said today. Economists expected GDP to shrink 0.8 percent, according to the median of 12 forecasts compiled by Bloomberg.
“Economic activity could be touching bottom, but there’s still an uncertain outlook,” Hugo Perea, the chief economist for Peru at BBVA Banco Continental, said today in a phone interview from Lima. “Stabilization still depends on whether global activity recovers.”
The government is tapping three years of fiscal surpluses to finance a $3 billion stimulus plan while the central bank has cut its benchmark lending rate to a record 1.25 percent to help revive demand in South America’s sixth-biggest economy. These measures, coupled with a …

Peru’s Talara Refinery Production Unaffected by Fire

By Nathan Gill Sept. 14 (Bloomberg) -- Petroleos del Peru SA, the oil producer known as Petroperu, said a fire at its Talara refinery in northern Peru didn’t affect production.

The fire, which started yesterday in the refinery’s vacuum distillation unit as a pressure meter was being installed, was “immediately controlled” and operations continued normally, company spokesman Victor Cordova said today in a telephone interview.
“The fire caused minor damage, and the refinery continues operating normally,” Cordova said. “At no time did production stop.”
The refinery, Peru’s second-biggest, processes 62,000 barrels of oil a day, Petroperu says on its Web site.

Three workers were injured in the blaze and were treated for burns, Cordova said.

Chile Economists Forecast 0.4% Inflation in September

By Nathan Gill and James Attwood Sept. 10 (Bloomberg) -- Chilean consumer prices will rebound in September after declining in eight of the 10 previous months, according to economists in a monthly central bank survey.
Prices will rise 0.4 percent in September from a month earlier, according to the median forecast of 28 economists in a survey released today by the bank. For all of 2009, prices will fall 1 percent, the survey said.
Chile’s central bank this week kept its overnight rate at a record low of 0.5 percent and reiterated plans not to raise borrowing costs after consumer prices fell 0.4 percent in August from a month earlier. The annual rate has declined every month since October, when it reached a 14-year high of 9.9 percent.
Economists in the survey said Chile’s economy will shrink 1.5 percent in 2009, unchanged from last month’s forecast.

The peso weakened 0.2 percent to 553.22 per dollar at 1:29 p.m. New York time from 552.35 yesterday.


Chile's Edelnor Rallies After Submitting Lowest Supply Bids

By James Attwood and Nathan Gill Sept. 9 (Bloomberg) -- Chile’s Empresa Electrica del Norte Grande SA rose the most in three months after announcing it offered the lowest price in bidding for new supply contracts.
The northern Chilean electricity producer known as Edelnor rallied 8.3 percent to 742 pesos in Santiago trading, the steepest advance since May 28.
Edelnor submitted the lowest bids for contracts to supply 1,800 gigawatt hours to 2,530 gigawatt hours to regulated clients in northern Chile from 2012 through 2026, it wrote in a statement posted today on the regulator’s Web site. The contract, if awarded to Edelnor, would “practically” double the company’s supply under contract, it wrote.

“It’s a very attractive long-term project in which the company guarantees its income until 2026,” William Baeza, an analyst at Euroamerica Corredores de Bolsa SA, said today in a telephone interview from Santiago. “It’s an element that adds to the company’s growth outlook.”

Edelnor is controlled …

Chile’s Arauco Sees Asia Recovery Driving Pulp Prices

By Nathan Gill Sept. 8 (Bloomberg) -- Celulosa Arauco y Constitucion SA, the world’s second-biggest pulp maker, said a recovery in Asian markets is boosting the price of pulp.
Demand for pulp at the forestry unit of Empresas Copec SA, Chile’s largest publicly traded company by market value, touched bottom last quarter and probably will remain at “good” levels in the second half, Gianfranco Truffello, chief financial officer of Copec’s Arauco unit, said today on a conference call.
The average price of radiata pine to China should increase to $567 in the third quarter from $503 in the second quarter, the company said today in an e-mailed statement. The company’s sales of wood pulp increased 11 percent to $402 million in the second quarter from $362 million in the previous quarter on higher volumes, Truffello said.

“We’ve seen important increases in price,” he said. “This recovery is pushed by the Asian markets, particularly China. We’ve also had decreases in costs of production.”

Brazil’s …

Chile Mudslide Kills 1 at Anglo Mine, Codelco Not Hit

By Nathan Gill and Matthew Craze Sept. 7 (Bloomberg) -- A road to Anglo American Plc’s Los Bronces copper mine in central Chile was hit by a mudslide, killing one worker. Mining operations weren’t affected.
Luis Rene Zurita Martel, a 52-year old contract employee at Anglo’s Los Bronces mine was killed today when the mudslide swept away the security patrol building he was in, national emergency office Onemi reported on its Web site. Ten others were injured and access roads to the mine were closed as of 8 a.m. New York time, Onemi shift manager Mauricio Bustos said in an interview on Chilean television.
The mine’s access road probably will reopen later today and light vehicle traffic has already resumed, Anglo American spokesman Marcelo Esquivel said today by telephone from Santiago. The mine is “operating normally,” he said.
Los Bronces is part of Anglo American’s Sur division, which produced 284,000 metric tons of copper last year, according to Chilean copper commission Cochilco. The ac…

Cristalchile Rises Most Since 1995 on VTR Sale Accord

By James Attwood and Nathan Gill Sept. 4 (Bloomberg) -- Cristalerias de Chile SA, a glass container producer, rose the most in 14 years after agreeing to sell a stake in cable television company VTR GlobalCom SA.
Cristalchile, as the company is known, rallied 15 percent, the most since April 1995, to 6,420 pesos in Santiago trading.
The company reached an agreement to sell its 20 percent stake in VTR GlobalCom to Inversiones Celfin Capital SA for 167 billion pesos ($303 million), it wrote in a statement posted last night on the Web site of Chile’s securities regulator.

The purchase is subject to VTR registering its shares on the Santiago securities exchange, Cristalchile wrote.

Chile Bank Loans May Rise 2 Percent, Association Says

By Nathan Gill Sept. 3 (Bloomberg) -- Bank lending in Chile probably will increase 2 percent this year as the economy rebounds in the second half from its deepest recession in a decade, the nation’s banking association said.

Commercial loans and consumer lending should rise about 1 percent this year, the Asociacion de Bancos e Instituciones Financieras de Chile wrote in a note distributed today by e-mail. Home loans should increase 5 percent, the association said.
Chile may be recovering from its worst economic slump since 1999 as prices rise for its exports, led by copper, President Michelle Bachelet said Sept. 1. The government has pumped more than $4 billion into the economy and the central bank has slashed interest rates by 7.75 percentage points this year, more than any major central bank.
“During the second half, economic activity should rebound, reversing current negative trends,” the bank association wrote in the statement.

Chilean banks’ combined profit increased 35 percent in J…

Chile's Copec Rises Most in Two Weeks on Earnings Outlook

By Nathan Gill Sept. 2 (Bloomberg) -- Empresas Copec SA, Chile’s largest producer of wood pulp, rose the most in two weeks on the prospect that gains in pulp prices may bolster earnings.
The nation’s largest publicly-traded company gained 2.4 percent to 6,620 pesos in Santiago trading, its steepest climb since August 18.
The BHKP global pulp price rose to the highest since January while the NBSK gauge climbed to the highest since December, according to Bloomberg data posted yesterday.
“All commodities are reacting positively to the rise in global markets,” Carla Araya, an analyst at Euroamerica Corredores de Bolsa SA, said in a telephone interview from Santiago. “Data shows that we could be touching the floor of this cycle.”
Copec’s forestry unit Celulosa Arauco y Constitucion SA yesterday reported second-quarter profit that matched estimates, suggesting that Copec’s earnings, due out this week, “won’t show any surprises,” Araya said.

Empresas CMPC SA, Chile’s second-biggest pulp producer…

Antofagasta Says Copper Demand to Increase This Month

By Matt Craze and Nathan Gill Sept. 1 (Bloomberg) -- Antofagasta Plc, the copper producer controlled by Chile’s Luksic family, expects copper demand to increase this month, a company executive said.
Demand should recover in September as industrial production in China expands and summer vacations in the northern hemisphere end, Marcelo Awad, chief executive officer of the company’s mining arm, said today in an interview in Santiago.
Manufacturing in China, the world’s biggest user of metals, increased at the fastest pace in 16 months in August, two surveys showed. The metal tumbled yesterday as equities dropped in Shanghai, raising concern that China’s economic recovery may stall. Copper prices doubled this year as Chinese imports soared and on signs that the worst of the global recession is past.
Antofagasta’s production will increase to 540,000 metric tons in 2010 from 450,000 tons because of an expansion at its Los Pelambres mine, Awad said. Production will increase to between 700,000…

Santander Chile Rises Most in Three Weeks on Earnings

By Nathan Gill Aug. 28 (Bloomberg) -- Banco Santander Chile, the country’s biggest lender, rose the most in three weeks after reporting profit that exceeded some analysts’ projections.
The Santiago-based bank gained 2.7 percent, the most since Aug. 3, to 27.72 pesos. The unit of Spain’s Banco Santander SA reported net income of 219.2 billion pesos ($398 million) this year through July, Chile’s banking regulator wrote in an e-mailed report yesterday, without giving the monthly figure. Profit rose to 35 billion pesos in July, a 19 percent increase from the previous month while interest margins, a measure of lending profitability, also gained 19 percent, according to Bloomberg calculations.
“The monthly results were slightly higher than our expectations,” German Serrano, an analyst at BanChile Inversiones, said in a telephone interview. Consumer loans “broke their downward trend” and “should begin a return to expansive growth in the next few months.”

Banks in Latin America also rose after …

Goldman Sachs, Celfin to Sell Derivatives in Chile

By Nathan Gill Aug. 27 (Bloomberg) -- Goldman Sachs Group Inc. and Chilean brokerage and investment bank Celfin Capital SA agreed to develop derivative products for Chilean pension funds, the country’s biggest investors, Celfin said.
Goldman Sachs and Celfin will create and market financial instruments, including cross-currency and interest-rate swaps, for the South American country’s private pension funds known as AFPs, Celfin Chairman Juan Andres Camus said today in a telephone interview.
Chile’s government authorized the funds to trade in derivatives in October as it tries to increase trading volumes in Latin America’s third largest market, according to Celfin. Pension funds had assets of $102 billion under management as of the end of July, according to the pension regulator.
“Today, this market is at zero,” Camus said from his offices in Santiago. “We don’t have a figure of how much this will penetrate, but we think the amounts will be significant.”
Celfin is growing in “all areas of…

Chile Banks’ Combined Profit Rises 35 Percent in July

By Nathan Gill Aug. 27 (Bloomberg) -- Chilean banks’ combined profit increased 35 percent in July from the previous month as greater confidence in the South American country’s economy boosted consumer lending.
Net income this year through July was 634 billion pesos ($1.2 billion), the banking regulator wrote in a report e-mailed today, without giving the monthly figure. July profit rose to 112.6 billion pesos, according to Bloomberg calculations. Consumer lending increased 0.5 percent and the combined interest margin, a measure of lending profitability, rose 17.5 percent, the report said.
Increased consumer loans may signal confidence in South America’s fifth-largest economy is improving and that lenders are responding to the central bank’s record low 0.5 percent overnight interest rate by cutting their own rates, Ruben Catalan, an analyst at BCI Corredor de Bolsa, said today in an interview.

“What’s increasing the most is on the mortgage side,” Catalan said from his office in Santiago.…

Chile’s Copec to Buy Tafisa Brasil for $165.2 Million

By Nathan Gill Aug. 26 (Bloomberg) -- A unit of Empresas Copec SA, Chile’s biggest pulp producer, agreed to buy Brazilian wood-panel maker Tafisa Brasil SA for about $165.2 million.
Placas do Parana SA, a unit of Copec’s forestry subsidiary Celulosa Arauco y Constitucion SA, will buy 100 percent of the Brazilian company from Sonae Industria SGPS SA, Arauco said today in a regulatory filing. The unit also will assume $61.8 million of Tafisa’s debt.
“The acquisition of this asset will allow Arauco to consolidate its presence in the Brazilian wood-panel market,” Arauco said in the statement.
Parana, Brazil-based Tafisa produces as much as 640,000 cubic meters a year of wood panels for the construction and furniture industries, according to the statement.
Copec rose 1.4 percent to 6,849 pesos in Santiago trading, the steepest gain in a week.

Chile Finance Minister Velasco Says Economy Stabilized, Will Improve

By Nathan Gill Aug. 21 (Bloomberg) -- Chilean Finance Minister Andres Velasco said the country’s economy has touched bottom and will show improvement in the third quarter as it emerges from its deepest recession in over a decade.
The contraction of Chile’s gross domestic product, which began last year and has seen consecutive quarters of negative growth, has stabilized, Velasco said today in Santiago.
The central bank last week voted to pause for the first time this year after cutting interest rates for seven straight months, saying that economic activity and industrial output suggest GDP may have already stopped shrinking.
“Monthly indicators from June show a slight recovery compared with a month earlier and today, practically all the forecasts, both foreign and Chilean, public and private, suggest a reactivation in the third quarter,” Velasco said after a speech at Chile’s Catholic University.
Chile’s GDP shrank 4.5 percent in the second quarter, the most in two decades, from the same …