January 10, 2008 12:00am
TRANSFIELD Services has jumped into the South American market with a 50 per cent stake in Chilean mining maintenance company Instrumentacion Y Servicios SA.
The $16.25 million stake in Inser will provide the platform for future growth opportunities, Transfield said.
Transfield chief executive Peter Watson said Inser had a strong local presence with blue-chip clients in the fast-growing Chilean mining sector.
The maintenance and project management services group said the acquisition fitted its strategy of expanding into new markets with favourable macro-economic conditions.
“Chile’s growth has been driven by investment in the mining and infrastructure-related industries, both industries in which Transfield Services has core skills,” Mr Watson said.
“The mining sector represents 63 per cent of Chile’s export market and has the potential to grow as this industry expands to meet growing demand for iron, copper, gold, silver, zinc and lead.”
Last year, the Chilean Government said it was planning to inject $US17 billion ($A19.2 billion) on new gold and copper mining investment over the next five years.
Copper is a key sector in the Chilean economy, with exports in 2006 reaching $US33.3 billion, mostly driven by China’s incredible demand for metals of all kinds.
According to a 2007 report from the Council on Hemispheric Affairs, the daily average copper price for the first half of 2007 was about $US3.06 ($A3.46) per pound on the London Metal Exchange. This is 11.5 per cent higher than the corresponding figure in 2006, it said.
Transfield shares closed down 19c to $13.32 in a weaker overall market.