SANTIAGO, Chile—Global mining companies have extracted copper from rich seams high in mountainous Chile for decades, but they are now also considering new investments in North America as copper-ore grades decline at Chilean mines in step with rival nations, while production costs rise.
Chile became the world’s largest copper-producing nation after forming state-owned copper-mining concern Corporacion Nacional del Cobre de Chile, or Codelco, in 1976 and later luring large mining companies with its copper-rich resources and cheaper labor.
Today, however, Chile’s mining industry faces rising costs for developing new ways to unlock further ore potential from deposits. Mining companies’ costs are rising here for electricity and desalination of sea water, which is pumped to mines at elevations of up to about 4,000 meters (13,200 feet). Chilean wages have also risen above those in the U.S. for certain workers as their productivity lags behind, while the U.S. shale-gas boom offers the hope of cheap energy despite a tough mine-permitting environment.
Chile’s competitiveness in the global copper-mining business is waning, and North America is likely to benefit, said executives from BHP Billiton Ltd., BHP.AU +1.30% Anglo American AAL.LN +0.30% PLC and Antofagasta ANTO.LN +3.07% PLC as the industry gathered in Santiago for its annual CESCO Week event, which starts Monday.
“We believe that North America is again a more competitive area for copper production,” Antofagasta Chief Executive Diego Hernandez said.
This is the primary reason for the London-listed company’s Toronto office, and Antofagasta is looking more proactively for potential opportunities in North America, Mr. Hernandez has said.
The new interest in North American projects comes despite recognition by miners such as BHP Billiton that Chile’s declining ore grades are in line with a global trend and that Chile’s copper resources will remain in demand.
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