Mining Stocks Tumble After Chile Election Results
Yesterday, continued concerns surrounding the rapid spread of Omicron weighed on the global markets, with most major stock indices falling as equities bore the brunt of ongoing uncertainty.
Amongst the session’s biggest casualties were several mining companies, including UK based copper producer Antofagasta and the world’s largest lithium producer, Chilean company Sociedad Química y Minera (SQM).
Both Antofagasta and SQM operate in Chile, and both fell by 5.51% and 15.26% respectively yesterday. These declines followed Sunday’s election results, in which left-wing candidate Gabriel Boric was elected to become Chile’s youngest ever president.
The president-elect’s proposed policies include raising taxes on mining companies and restricting projects which damage the environment. If enacted, both these policies could make life difficult for mining companies operating in Chile in the future, hence the market’s adverse reaction.
Furthermore, Boric has also stated his desire to create a state-owned national lithium corporation to take charge of developing the country’s lithium industry, which could pose a threat to SQM.
Further volatility is to be expected in both of these companies over the coming sessions, as the market awaits news regarding the president-elect’s cabinet choices. Depending on the signal this sends to the market regarding how the country will be governed going forward, we could see further declines in both of these mining stocks.
Antofagasta Share Price Five-Year Evolution
Sociedad Quimica y Minera Share Price Five-Year Evolution
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