I read a blog on the Economist showing America’s view on Chile’s mining industry. Since our world relies heavily on mining to extract valuable minerals, fossil fuels, natural gas and petroleum, all of which we consume on a daily basis, I thought it was interesting to bring up the blog of a professional in the industry. Copper is an internationally traded metal which is both malleable and ductile. These properties make it a useful material for industrial electrical applications (copper has the highest electrical conductivity of any metal). Copper is now reaching a sky-high price, giving rise to corporate “drama”. Since copper is an essential exported good of Chile, the CEO of the mining company wishes to undertake an expansion strategy, as opposed to just a change in the company’s tactics. However, government intervention would prevent too much market power for any single firm, because of the Competition Act. If the firm successfully acquires the British conglomerate (Anglo American), they could decrease output of copper and raise prices to earn more profit. Since copper is not a renewable resource, the fluctuations in price would affect goods that are used jointly, such as wiring in electronics and substitutes.

Reference: http://www.layher.com.au/assets/projects/chileancoppermine.jpg

http://www.economist.com/blogs/americasview/2011/11/chiles-mining-industry