The flow of Foreign Direct investment (FDI) into the South and Central America copper mining industry is a key factor in maintaining the region’s high production levels in the future, according to a new report by mining sector analysts GBI Research.

The report* says that the massive reserves in countries such as Chile and Peru, combined with a predicted increase in the price of copper, are prompting huge investments from companies around the world.

Investments in Chile, the biggest copper producing country in the world, are expected to reach a staggering $41.4 billion during the period 2010-2015, while countries such as Mexico, Brazil and Peru are benefiting from billions of dollars in investments from companies based in China and Canada, amongst others.

As well as vast quantities of available material, investments in the area are sure to be driven by rising copper prices. According to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), copper prices are expected to increase by 15% from $6,762 per ton in 2010 to $7,779 by the end of 2012 – serving as a further incentive to investors.

South and Central America is the largest copper producing region in the world and is expected to produce 9,862 thousand metric tons of the metal in 2012 alone. Due to the continued interest of these international companies, GBI Research predicts this amount to climb steadily to a 2020 production volume of 16,073 thousand metric tons, climbing at a Compound Annual Growth Rate (CAGR) of 6.3%.

GBI Research expects Chile to remain the region’s number one copper producer in the future, with an output of 7,751 thousand metric tons predicted for 2020. However, thanks to the implementation of massive new mining projects, Peru is expected to decrease this disparity by boosting production from 1,435 thousand metric tons in 2011, to 6,171 thousand metric tons by 2020.