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Chile Mining: Good Outlook 

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Chile's copper boom continues, but mining companies are also facing several key challenges.

BY CHRONICLE STAFF

Thanks to high international prices of copper and expanded production, Chiles mining sector is expected to post another strong performance this year, industry officials and experts say. However, it also faces challenges relating to energy and water supplies, possible labor unrest and a slowdown in the U.S. market.

"We are going to have a year with good prices," José Pablo Arellano, executive president of Chilean state mining company Codelco, said last week. "We see demand remaining at very high levels."

Private mining companies are also bullish. "Although economic growth has not been reflecting the positive economic cycle in Chile, a more optimistic outlook is forecasted for 2007," says Tracey Whitehead, a London-based spokeswoman for Australian-British mining giant BHP Billiton. The company owns 57.5 percent of Escondida, the worlds largest copper mine. "For the mining sector a good year is anticipated due to prices - mainly copper - which have remained strong to date and also new installed capacity."

RECORD PROFITS

The optimism comes as Codelco, BHP Billiton, Xstrata and other mining companies are reporting record profits from their Chile operations.

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