Australia’s EFIC extends US$100 m loan to BHP Billiton and Rio Tinto for Chile and world’s largest copper mine

(Herald Sun, Melbourne, 18 March 2014) Mining giants BHP Billiton and Rio Tinto have been granted a $110 million “soft loan” from taxpayers to help expand the world’s biggest copper mine, in Chile. Australia’s export credit agency, the Export Finance and Insurance Corporation, has extended the $US100 million ($110.5 million) loan to the miners — the world’s biggest by market value. The funds will help cover the cost of a $US3.8 billion equipment upgrade being carried out by BHP and Rio at the Escondida mine, in Chile’s Atacama Desert. The latest deal by the credit agency — a little-known government de facto bank — has spark renewed criticism that it is favouring the big end of town over smaller exporters struggling to break into global markets. Jubilee Australia chief Brynnie Goodwill said the agency should be supporting small and medium-sized enterprises rather than “well-endowed companies which have access to global capital through their shareholders or the markets”.

A 2004 Chilean study showed that, with 0.25% of the earth's surface, Chile holds 37% of known copper reserves, and that neoliberal denationalization of mining in the 1990s, followed by a tripling of production by foreign transnational corporations, led to a drop in prices and a fall in government revenues from U$1.8 billion a year at the end of the 1980s to US$300 million in 2000.