Big, fat mining salaries fueling Chile’s consumer boom
Spending by Chilean miners is providing a boost to GDP, as the mining boom continues to shrink unemployment and to push salaries to new highs.
Truck drivers at the BHP-operated* Escondida mine site, for example, now earn the equivalent of $80,000, more than their counterparts in the United States.
In a story line surely familiar to Western Australians and Albertans, young Chilean men are dropping out of school early to cash in on the boom. Young miners working in Antofagasta and other mining cities and towns are buying homes and fancy cars. Some of the seasoned veterans are looking to purchase their fourth or fifth properties.
The amount of money that miners are kicking back into the Chilean economy is so significant that each new mining job generates three more jobs elsewhere, often in retail, Bloomberg reported on Monday.
While Chile’s mining is not without its challenges, including a lack of power and insufficient water supply, the industry continues to drive the economy forward:
On the back of mining, and of the copper industry in particular, Chile’s GDP grew 6% in 2011 and 5.6% in 2012. GDP per capita has risen from $4,780 to $16,300 in just one decade.
The ongoing boom has even attracted an increased number of Australian exploration firms, looking to escape a dried-up industry at home and to strike it rich in the Andes.
*Rio Tinto has a 30% interest in Escondida
Sources: Matt Craze & Javiera Quiroga from Bloomberg, the Northern Miner, InfoMine, The Herald Sun Business