Chile attracts a record US$13.7 billion in foreign investment
The mining sector continues to draw the lion's share of foreign capital,
with Canadian companies providing the largest source of investments.
Thursday, December 29, 2011
Heavy investment in Chile's mining industry followed in the wake of strong copper prices. (Photo: Codelco)
Amid a backdrop of global economic uncertainty, foreign investors continue to view Chile as a trustworthy option, throwing their support and their capital behind numerous major projects in the South American nation.
Total foreign investment approved in Chile this year reached US$13.8 billion, a new record, and a 4 percent increase from 2010.
The good news is largely due to the consistently strong mining sector, buoyed by high copper prices. Mining projects received 70 percent of authorized foreign investment this year.
Data released by Chile's Foreign Investment Committee (CIE) show that 29 of the 88 investment applications received throughout 2011 were directed towards mining projects. Together, they accounted for a total of US$9.6 billion.
Chile's service sector also proved to be a strong draw for overseas investors, accounting for 16.7 percent of foreign capital.
And while the energy sector only received 5.9 percent of Chile's foreign investment applications during 2011, the CIE expects that will change in the new year after fielding inquiries about local energy and infrastructure projects.
The CIE said the record figure for 2011 highlighted the excellent conditions for doing business in Chile.
“The country is known for being reliable, and having clear rules and excellent opportunities for receiving investors,” said CIE Vice President Matías Mori, in a statement.
“In a world where the competition for attracting investors is continuing to intensify, Chile is seen as a reliable destination for foreign investors.”
The biggest source of approved foreign capital in Chile during 2011 was Canada, with companies based in the North American nation contributing 59 percent of total foreign investment.
But the standout feature of 2011 was the rise of Asian investment in Chile, with Japan, Korea and China figuring among the top 10 sources of foreign capital for the first time.
“This is especially important, considering that historically, Asian investment has only represented 4.1 percent of foreign investment in Chile,” Mori said in the statement.
And according to the CIE, 2012 is also set to be a good year for foreign investment, as Chile continues to buck global trends.
“Historically, when foreign investment figures [abroad] are at a crisis point, in Chile, the figures tend to rise,” Mori told La Tercera.