Customers' Unmet Needs and Pains

Mining in Chile Current Pains Analysis¶

The B2B customers that purchase Chilean mineral products—overseas smelters, refineries, industrial manufacturers, metal‐trading houses, and a small set of domestic industrial users—report a series of pressing pains that stem directly from structural challenges in Chile’s mining value chain.

Supply-side unreliability
• Strikes, community protests, and regulatory delays recurrently halt extraction and processing, triggering missed shipments and forcing customers to scramble for alternative feedstock.
• Severe water scarcity in the north constrains concentrator throughput and heap-leach operations, amplifying the risk of shipment shortfalls.
• Port congestion and inland-haulage bottlenecks further erode on-time delivery performance.
Escalating costs & price volatility
• Declining ore grades (+16 % more material moved per tonne of copper vs. 2010) and soaring energy/water inputs have lifted C1 cash costs > US$ 1.70/lb at some operations, feeding directly into concentrate and cathode price negotiations.
• Multi-billion-dollar desalination projects, carbon-neutral power purchase agreements (PPAs), and prospective royalty hikes inject additional cost uncertainty into long-term offtake contracts.
Long-term supply anxiety
• Exploration spend fell 4.6 % YoY in 2024 and permitting timelines now average 8-10 years, eroding confidence that future demand (e.g., for the energy transition) can be met.
• Customers fear tighter concentrate markets post-2028 as large brownfield projects (Chuquicamata UG, Los Bronces IP, Quebrada Blanca Fase 2) plateau.
ESG & transparency pressures
• Asian and especially European buyers must evidence low-carbon, low-water-intensity inputs; yet only 38 % of Chilean output currently ships with third-party-verified sustainability data (ICMM, Copper Mark, etc.).
• Tailings safety and community-impact controversies expose buyers to reputational risk and force costly additional due-diligence audits.
Product-quality variability
• Lower head grades translate into higher impurity profiles (As, Sb, Bi) in concentrates, obliging smelters to increase blending or pay penalties; cathode purity remains high but availability of “Grade A, LME-registered” units tightens during disruptions.

Unmet Needs and Pains¶

1. Guaranteed Physical Delivery Windows¶

Need – Contract mechanisms or logistics solutions that ensure arrival of concentrates/cathodes within ±3 days of the scheduled laycan.
Pain – Current average deviation reaches 7–10 days; force-majeure clauses linked to labor or community events leave customers exposed to downstream shutdown costs.

2. Cost-containment & Pricing Predictability¶

Need – Multi-year pricing structures that buffer input-cost pass-through (energy, water, royalties) and limit TC/RC volatility.
Pain – Annual benchmark TC/RC negotiations swing > 30 % YoY, complicating refinery margin planning and hedging strategies.

3. Long-term Secured Volumes Aligned with Energy-Transition Growth¶

Need – Ten-year+ offtake assurances with production ramp-up schedules matching projected EV, solar, and grid-expansion demand.
Pain – Exploration pipeline uncertainty and permitting delays undermine the ability to lock in future tonnage, forcing smelters to diversify away from Chile and accept lower-quality sources.

4. Verifiable Low-Carbon, Low-Water Footprint Copper¶

Need – Traceable ESG credentials (Scope 1-3 CO₂ < 1.5 t/t Cu, water-stress score < 40 m³/t) certified by international standards such as Copper Mark, IRMA, or ICMM.
Pain – Partial, inconsistent disclosure across producers; only select mines have renewable-power PPAs or desalination offsets fully auditable by buyers.

5. Stable Impurity Levels and Custom Blending Options¶

Need – Consistent concentrate specs (As < 0.5 %) or access to on-site pre-blending services before shipment.
Pain – Rising arsenic levels (some deposits > 1 %) impose smelter penalties up to US$ 20/t concentrate and increase metallurgical risk.

6. Digital, Real-Time Supply-Chain Visibility¶

Need – Port-to-smelter tracking platforms integrating IoT sensors and blockchain bills of lading.
Pain – Limited digitalisation leaves customers blind to in-transit delays, impairing refinery scheduling and working-capital optimisation.

Need – Joint mechanisms (insurance pools, take-or-pay clauses with rebate triggers) to address disruptions from social conflict, extreme weather, or regulatory change.
Pain – Current contracts place disproportionate risk on buyers, who shoulder production gaps without financial compensation.

8. Accelerated Permitting & Project Transparency¶

Need – Clear timelines and stakeholder-engagement roadmaps for greenfield/brownfield projects that will feed future supply agreements.
Pain – Opaque, multi-agency permitting causes unpredictable start-dates; customers lack visibility to incorporate new supply into long-range procurement strategies.

Key Findings¶

#	Unmet Need / Pain	Root Cause in Chilean Value Chain	Impact on Customer	Opportunity Space
1	On-time Delivery Assurance	Strikes, community conflict, port bottlenecks	Production stoppages at smelters; inventory costs	End-to-end logistics optimisation, contingency stockpiles, risk-linked SLAs
2	Cost & Price Stability	Rising energy/water costs; fiscal uncertainty	Margin erosion; budget instability	Indexed pricing formulas, long-term renewable PPAs, water-cost hedges
3	Long-term Volume Security	Exploration slowdown; permitting delays	Strategic supply gap for energy-transition metals	Co-investment in exploration; streaming/royalty finance
4	Certified Low-Carbon Copper	High grid-emission factor; limited renewables adoption	ESG compliance risk; potential EU CBAM charges	Green-copper certification, renewable power switching, desalination with solar
5	Consistent Concentrate Quality	Declining ore grades, complex metallurgy	Penalties & processing inefficiencies	Pre-processing, selective mining, impurity-removal tech
6	Real-Time Visibility	Fragmented IT systems across miners, transport, ports	Planning uncertainty; working-capital drag	Integrated digital platforms (blockchain, IoT)
7	Shared Disruption-Risk Tools	Traditional take-or-pay contracts favour sellers	Financial exposure during force majeure	Parametric insurance, dynamic contract clauses
8	Transparent Project Pipeline	Lengthy, opaque permitting	Difficulty matching demand growth	Joint advocacy for regulatory reform; early-stage data sharing

References¶

Anglo American. (2025, February 25). Anglo American FY 2024 Results.
Antofagasta. (2025, February 18). FULL YEAR RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024.
Cochilco. (2025, February 10). Producción chilena de cobre crece 4,9 % en 2024, quebrando tendencia a la baja de los últimos cinco años – COCHILCO. https://www.cochilco.cl/Listado%20Temas/Producci%C3%B3n%20chilena%20de%20cobre%20crece%204,9%25%20en%202024.pdf
International Mining. (2025, April 4). Collahuasi's solid 2024 results plus growth & efficiency plans. https://www.internationalmining.com/news/collahuasis-solid-2024-results-plus-growth-efficiency-plans/
International Trade Administration. (2023, December 7). Chile – Mining. https://www.trade.gov/country-commercial-guides/chile-mining
Portal Minero. (2025, February 5). Chile lidera inversión en exploración de cobre a nivel mundial. https://www.portalminero.com/noticias/chile-lidera-inversion-en-exploracion-de-cobre-a-nivel-mundial/
Reporte Minero. (2025, February 5). Gasto en exploración minera en Chile cae un 4,6 % en 2024. https://www.reporteminero.cl/noticia/noticias/2025/02/gasto-en-exploracion-minera-en-chile-cae-un-46-en-2024/
The Rio Times. (2025, March 31). Codelco Ends 2024 with Financial Gains but Faces Long-Term Pressures. https://www.riotimesonline.com/brazil-news/mercosur/chile/codelco-ends-2024-with-financial-gains-but-faces-long-term-pressures/