Business & Trade
Chile and Australia are both located in the southern hemisphere and have a relatively similar structure of production, nevertheless the trade between the two countries almost doubled between 2000 and 2005 (see image). The number of Australian tourists to Chile has increased every year since 1998(see image) and Chile has become an important platform for Australian businesses with links in Latin America, this is demonstrated by the high levels of Australian investment in Chile (see image). The fact that both countries are mineral producers and have strong agricultural sectors has not impeded the development of various types of business, especially strategic ventures.
The economic bilateral relations have been consolidated through various initiatives; the most important of these are outlined below:
Mining Investment and Joint Initiatives
On the 28th of April this year the Chilean Economic Group Luksic completed the takeover of 96% of Tethyan Copper Ltd (www.tethyan.com). Tethyan is an Australian Copper Mining Company with its headquarters in Perth, Western Australia. The takeover was performed by the Luksic company Antofagasta Minerals SA which makes its sales through the London Metal Exchange under the name Antofagasta PLC (www.antofagasta.co.uk).
As part of the acquisition (valued at US$150 million) the Luksic Group also acquired an important copper and gold deposit known as Reko Diq in western Pakistan. The group has noted that it is interested in the total acquisition of Tethyan, as well as acquiring the mining rights of the Reko Diq mine in Pakistan which are currently held by BHP Billiton; these rights are valued at $US 60 million. It is estimated that in the coming years the total investment in Pakistan and Australia by the Group will reach $US 600 million
The Chilean investment in Australia has grown in recent years to $US 190 million; this makes Chile the largest Latin American investor in Australia. The increase in investment is due in a large part to the actions of the Angofastina firm CONYMET who acquired DURATRAY in 2004. This created the company Conymet-Duratray Pty Ltd which is valued at $US 40 million. Also contributing to the Chilean investment in Australia are the smaller investments of LAN-Chile (see below), the acquisition of the Olympic Dam project by BHP-Chile and future purchases by other Chilean companies that are currently in negotiation which will establish them in the Australian market (SONDA and Viña San Pedro).
Chilean Trade Missions that visited Australia in 2005
Read a complete report prepared by the Trade Office (ProChile) here (in Spanish)
Australian Minister for Industry, Tourism and Resources visits Santiago
After the Presidential visit of Mr Ricardo Lagos to Australia in July 2005, the Australian Minister for Industry Tourism and Resources, the Honourable Ian McFarlane MP, visited Chile and other countries in the region in August. As part of the visit he met with Chilean economic authorities focusing on matters concerning innovation, mining cooperation and the energy sector.
Business, Trade and Bilateral Investment Agreements discussed during the Presidential visit.
During the Presidential visit of July 2005, a mining forum titled “Opportunities across the Pacific” was held in Sydney, the forum was organised by the Trade Office (ProChile) of the embassy. Between 160 and 170 people attended the forum where the President of Chile made the closing address. He mentioned the challenges the mining industry faces and the necessity to coordinate efforts in the sector. He also recounted the reasons behind Chile’s decision to establish royalties in mining.
President Lagos was the special guest at a lunch held by the Australia Latin America Business Council (ALABC) at the Hotel Shangri-La in Sydney. The event was a great success with over 450 people present and a number of important speakers. It was noted the interest that Chile is awakening in Australian economic circles despite its geographic distance. Images of the event and of the mining forum can be seen below.
It is important to also note that on the part of the Australian Government the Acting Prime Minister and the Minster for Trade, The Honourable Mark Vaile MP and the Minister for Industry, Tourism and Resources, The Honourable Ian McFarlane MP attended the aforementioned conference where both articulated their points of view to the audience.
The speech given by the President of Chile described the new dimension of the Pacific as the centre of world activities where Australia and Chile, who were previously peripheries, occupy central positions. He recounted the potential of the bilateral relations, based on our production similarities and the need to give added value to the relationship through shared knowledge and strategic alliances. He also noted the political stability in Chile, independent of the result of the pending presidential elections, and the capability of Chile to convert itself into an entry point for Australian businesses to other parts of Latin America.
At the same time as the Presidential visit, the Minister for Mining of Chile Mr Alfonso Dulanto Rencoret completed a heavy schedule of technical visits based on strengthening contacts to stimulate bilateral scientific cooperation. As well as participating in the Mining Forum he met with the Australian Minister for Industry, Tourism and Resources, The Honourable Ian McFarlane MP. They spoke on topics that included the state of the project to build a new regasification plant in Chile (in which Australian companies are interested), the mining royalties in Chile, the “reach” initiative of the European Union (an initiative that forces both countries to take joint positions against new European protectionism measures) and the relations between the Australian mining companies and the local communities in Chile.
Also as part of the Presidential visit, the Undersecretary of the Economy, Mr Carlos Alvarez Voulliéme met with his counterpart the Deputy Minister for Industry, Tourism and Resources, The Honourable Tim Mackay MP. Mr Alvarez also held a meeting with a team from the Department of Innovation of the aforementioned Ministry in order to learn from the Australian experiences in management and politics in the field. Of great interest is the program that was discussed at these meetings “Backing Australia’s Ability”. The program offers possibilities for productive alliances between both countries. The Undersecretary also spoke of the construction in Chile of the Fondo de Innovacion para la Competitividad (Fund for Innovation to increase Competitiveness), whose proyecto de ley (mission statement/ business plan/ objectives???) is/ are being discussed in the National Parliament of Valparaíso.
Business Seminars in Brisbane and Sydney
Between the 18th and the 20th of May, three seminars were held in the capitals of Queensland and New South Wales on the opportunities for investment in Chile. Participants included, among others, the Chilean Embassy, the Director of ProChile, Mr Hugo Lavados and the Executive Vice-President of the Committee on Foreign Investment, Mrs Karen Poniachik. 270 people participated in the seminars which made them one of the most successful and highly attended business activities of the year. Both Mr Lavados and Mrs Poniachik performed other activities relating to their respective roles. Images of the seminars can be viewed below.
For more details on the visits of Mr Lavados and Mrs Poniachik please click here (en español/in Spanish)
Increase in direct flights between Santiago and Sydney
An agreement was signed between Canberra and Santiago in 2001 to promote the establishment of new flights between South America, Australia and New Zealand and to increase the limited frequency of aerial transport that exists for passengers and cargo between both regions.
As a result of the agreement, regular flights were initiated by Qantas and LAN-Chile operating the new Airbus 340 on the 30th of June in 2002. The route taken was Santiago – Auckland – Sydney – Auckland – Santiago. This follows the historic route of the Boeing 707 of LAN-Chile that joined Punta Arenas with Sydney via the first non stop flight over the South Pole on the 10th of February 1974,.
The flights have been successful in number (today more than 6,000 people travel between the two countries), quality (tourism, economic and educational relations have increased since then) and frequency (since last December the number of flights has increased to five per week)
For more details on tourism in Chile and the number of Australian tourists in Chile please click here.
Bilateral Commission on Trade and Investment
Signed by both countries on the 18th of May 1998 in Geneva the agreement aims to support the agreements established in the WTO and at the same time develop the functioning of the Asia Pacific Economic Cooperation (APEC). The text of the agreement can be viewed in the memory of the Department of Foreign Affairs of 1998 international instruments. memoria del ministerio de relaciones exteriores de 1998 (instrumentos internacionales)
Up until now two meetings have been held in Santiago: the first was held between the 24th and the 26th of November in 1998, as part of the visit to Chile of the Deputy Prime Minister of Australia, the Honourable Tim Fischer MP. The second meeting was held in September of 2001, during the visit of the Australian Minister for Trade the Honourable Mark Vaile MP. On the second visit the bilateral air services agreement was also signed. The text of the joint declaration made at the second meeting of the commission can be accessed here.
Last updated: September 11, 2002