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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…