Chilean mining equipment technology and services (METS) supply sector have been historically focused on servicing domestic mining companies, paying limited attention to international markets. In this context, the Government of Chile sought to promote export performance across the sector.
The Ministry of Mines of Chile (the Client), with funding from the Chilean Ministry of Economy, engaged CRU to help identify key export opportunities and potential policy support measures as part of an overarching plan develop the sector and promote stronger economic linkages between the domestic mining sector and the wider economy.
Specifically, CRU researched the following key issues and questions:
- What is the size and nature of the domestic METS sector?
- What are the key opportunities and barriers to expansion and investment in the sector?
- How do commercial opportunities and weaknesses differ across subsegments of the industry?
- How can policy be employed to support improved export performance and which segments of the industry should be targeted?
Methodology
Our research combined detailed market intelligence gathering in the domestic METS sector combined with an appraisal of the outlook for international export demand, profitability and the wider competitive environment.
As part of our domestic qualitative research programme, CRU developed a database of over 4,000 suppliers across 36 identified METS segments. These segments were subsequently filtered down to eight based on an assessment of their expected profitability and forecast demand growth.
Source: CRU
CRU undertook an extensive programme of telephone and face to face interviews to understand the key firm level context in each of these key segments, including direct evidence on opportunities and impediments to improved export performance.
Source: CRU
This domestic market intelligence was complemented by a rigorous analysis of the international market for METS sector goods and services, drawing on CRUs specialist expertise in upstream sector and project analysis to identify priority export markets.
We subsequently undertook more detailed research to identify potentially high performing METS market segments with our key target countries, together with an assessment of the potential import requirements for these products and services.
Source: CRU, Chilean customs
Our policy recommendations were informed by a series of case studies drawn from internationally leading METS sector, which assessed sector composition and performance, key comparative advantages and competitive positioning, together with a detailed picture on the institutional and policy support available to individual segments.
Our recommendation
Our research was a key input into the design of the national export strategy for the mining sector. We recommended strategic focus on six sub-segment, including, for example, plant and grinding equipment supplies. These offered robust growth and value generation opportunities, evidenced by research in comparative advantages of the domestic firm base and an understanding of a favourable international market environment.
CRU also provided the authorities with detailed policy guidance on the most appropriate mix of policy support based on firm-level research into the key barriers to improved export performance, including access to skills and technology.
Source: CRU
