Chile is the world's largest producer of copper, and mines have now been closed for two days. Among the closed mines is El Teniente, the world's largest underground copper mine. What I'm getting at, is Chile is a major producer of copper, and production has come virtually to a halt.
Although many mines are expected to reopen within the next few days, even a small change can make a huge difference. An analyst Macquarie Group Ltd. says, "We see copper as the tightest of the base metal markets. Even if it's just 1% of global supply that is affected, it would be significant."
This could mean a lot for Chile, seeing as copper make up about 50% of Chile's $53 billion of exports. Even in the last few years, prices for Copper have more than doubled, and just in 2009, production rose nearly 1%.
Assuming mines do reopen within the next few days, what could this mean for the Chilean economy? How much of this will affect the world economy for copper?
Even if Chile is able to open its mines back up in the next few days, are they going to have the capital and especially the human resources to keep it running at its full potential? I think that this earthquake will definitely have major effects on its GDP. I'm guessing it will make their net exports plummet since there will be much less to subtract the amount of imports from. While I don't doubt that Chile's economy will take a hit, I think that it will be able to make a smooth recovery over time since their economy is pretty robust.
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