Maquinaria Lorenzana S.A.

To get a ton of red metal companies have to spend US$ 20.5 million.

It is becoming more difficult for mining companies to take the investment decision to begin the construction of a new project.

And that's because in the last decade the necessary investment (in capacity) to produce a ton of the red metal has risen 4.5 times, proving that every time is more complex to take forward these initiatives.

According to the figures of Chilean miner Council published on its website, in 2003 the companies in the sector spent US$ 4.5 million per ton of copper as Capital Expenditures. In 2013 to achieve the same amount required US$ 20.5 million on average.

For example, if at the beginning of the decade the project minera Gaby, of the Chilean State owned firm, required an investment of close to the US$ 10 million to produce one ton of red metal, today these amounts can reach the 35 million US$, as it happens in the expansions of Escondida and Quebrada Blanca, according to industry data.

C.E.O. of the mining Council, Joaquín Villarino, explains that the rise is a consequence of the increase of costs in the construction of projects.

This is the result, mainly, of the rising costs of equipment, engineering services and construction services. Also affect the higher environmental standards that must comply the mining projects, both by regulatory requirements as for a greater commitment of the sector with sustainability, Villarino says.

Some time ago, the Executive President of Antofagasta Minerals, Diego Hernández, held that the installation of a mining camp was more expensive than a house in Las Condes. We have or we can have a real estate bubble in the mining camps, since their cost is much higher than in Santiago or in the richest parts of the city, said Hernandez at the end of 2012.

in addition, the study commissioned by Codelco, where it is concluded that national contractors - who are more involved in the construction of mining projects - produce half the time that workers in developed countries. If in Chile is used 38% a day efficiently, in the competitive Nations the percentage raises to 62%.