Economic losses from the devastating earthquake that struck central Chile at the weekend could top $US30 billion, or 15% of total output, early estimates say.The official death toll has passed 700, with most deaths coming from people crushed in collapsed
Economic losses from the devastating earthquake that struck central Chile at the weekend could top $US30 billion, or 15% of total output, early estimates say.
The official death toll has passed 700, with most deaths coming from people crushed in collapsed buildings.
The earthquake was the fifth largest in the history of recorded disasters, with a strength of 8.8, and was centred near Chile’s second largest city, Concepcion.
Chile’s president-elect, Sebastian Pinera, has warned that damage from the powerful earthquake is worse than initially thought.
“I want to warn Chileans that the magnitude and the impact of this earthquake and this calamity is much deeper, much more damaging and much more serious than we thought,” Mr Pinera said in broadcast comments.
Chile’s exports are dominated by copper mining, which has not been badly effected, though its agricultural produce could be more hard hit.
Apples impact
For example, the large apple-growing industry has been affected by widespread destruction of trees and transport links just as the harvest is starting.
This could cause apple prices in European markets to rise, benefiting other suppliers such as New Zealand, Turners & Growers chief executive Jeff Wesley said.
Chilean apples are major competitors with New Zealand in off-season northern hemisphere markets.
Copper prices immediately rose to 11-month highs in after-hours electronic trading on the Comex division of the New York Mercantile Exchange as news came through of mines being shut.
These were due mainly to power losses, which affected only four mines producing 16% of the total output. Production has since resumed as power was restored. Most of Chile’s copper deposits and port facilities are located in the northern half of the country and had no reports of damage.
Bridges destroyed
The $US30 billion top figures of damage costs comes from Eqecat, a catastrophic events risk assessor. It says most of the damage – 55-65% – would be from residential structures, with commercial damage accounting for 20-30% of the total and industrial damage making up 15-20%.
Apart from buildings, the main damage was to the highway and bridges. The Pan-American highway, the country’s main thoroughfare, was closed at several points south of Santiago, although bypasses have been set up.
Finance Minister Andres Velasco said it was too early to estimate the economic cost of the quake. He added that Chile’s policy of funneling windfall copper profits into a $US14.7 billion rainy-day fiscal savings fund would help shoulder the cost of rebuilding.
“Chile has saved for a very long time in order to have the savings to be able to face situations like this,” he said.
Chile’s securities exchange said it would operate as normal on Monday.
