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Showing posts from September, 2009

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…