Since Chile is home to the world’s largest copper reserves, the metal is the country’s most precious resource. The mining of the “red metal” drives most of the investment and creates most of the wealth in the country. Last year, more than 1 million tons were taken out of the country’s Escondida mine, the largest in the country. In all, total copper exports from Chile in 2012 were valued at about USD47 billion.

As I pointed out in this issue’s Feature Article, copper is Chile’s bread-and-butter and the country will continue to benefit from strengthening copper demand in 2013.

While US investors can’t easily invest directly into Chilean copper mining operations, two of our Metals & Mining Portfolio holdings have exposure to the country’s mining industry.

BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RIO) jointly own and operate Chile’s Escondida mine, which in addition to copper also produces gold and silver.

Last year, the mine produced just over 1 million tons of copper and its two operators estimate that production will increase by 20 percent this year. To help facilitate that increase, new access points to the miner were developed last year and machinery and equipment were upgraded to handle the higher anticipated workload.

In addition, $4.5 billion worth of expansion projects are slated for this year alone. Assuming that copper prices and production costs remain steady throughout 2013 that equates to nearly USD3 billion in revenue from Escondida alone.

Escondida is Rio Tinto’s only sizable copper project in Chile, while BHP Billiton is also involved with the Spence mine located in the northern end of the country. Given the size and global scope of the two miners, neither has particularly concentrated exposure to Chile. Still, the same trends benefiting the country itself will continue to drive growing earnings at the two outfits.

Continue to buy BHP Billiton and Rio Tinto up to 80 and 60, respectively.

While it might be tough to tap into Chilean mining directly, it is an extremely energy intensive business. Consequently, investing in major regional electricity producers is a backdoor way of gaining exposure to the mining industry while also taking advantage of surging consumer demand.

Empresa Nacional de Electricidad (NYSE: EOC) was privatized in the 1980s when Chile began selling off its nationalized assets. Since then, Empresa has grown to be the largest electricity generator in Chile; it’s now more than two times the size of its two closest competitors.

In addition to its Chilean presence, Empresa also has operations in Argentina, Brazil, Columbia and Peru, although Chile accounts for about half of the company’s revenue and profits.

The company’s share price is relatively flat over the trailing year, after suffering setbacks due to La Nina. More than 60 percent of Empresa’s electricity comes from hydrologic generation, so the company enjoys a leg up on many of its competitors that rely more on thermal generation because of geographic considerations. But that blessing proved to be a bit of a curse in 2012, as La Nina ushered in drier weather, reducing flows through Empresa’s dams. As a result, it was forced to purchase energy in the spot market last year to meet demand, boosting its cost of operations.

However, La Nina is forecast to abate this year, allowing Empresa to get back to business as usual. And business is booming as it has seen demand for power in its territories nearly double over the past decade. With electricity demand expected to continue on that growth path, Empresa plans to double its generation capacity over the decade to meet that growing need.

The newest addition to our Long-Term Portfolio, buy Empresa Nacional de Electricidad up to 55.

An interesting way to play the consumer demand created by Chile’s mineral wealth is to look at the country’s growing wine industry.

About 8,000 growers cultivate grapes on about 120,000 hectares of Chilean agricultural land, a nearly 70 percent increase over the past decade.

While Chilean consumers have historically favored beer as they’ve become more affluent, many are beginning to drink more wine with per capita consumption up to about 19 liters annually. On top of that, Chilean wines, particularly reds, have gained favor with global consumers, pushing Chilean wine exports up over 1 million liters per year. In aggregate, nearly USD2 billion worth of wine was exported in 2010, nearly double that of 2008.

Vina Concha y Toro (NYSE: VCO) is a leading Chilean wine producer growing 25 grape varietals across 8,800 hectares in Chile with another 1,100 hectares in Argentina and 450 in the US. On average it is capable of producing about 43,000 barrels of wine per year.

The company has been a major beneficiary of growth from regional and international demand. In dollar terms, it has managed to grow its sales by 18 percent annually, while volume has averaged 10 percent annual growth over the same period.

The company has been aggressively expanding its product offerings and recognition level over the past several years, acquiring Fetzer wines in 2011 and sponsoring high profile events such as major golf championships in the US. It also invests heavily in growing and improving its productive capacity to the tune of about USD55 million per year.

Thanks to these efforts, the company’s export volumes have grown from a value of about USD250 million in 2005 to USD577 million is 2011, the last year for which complete figures are available. That equates to 20 million 9-liter bottle cases per year. On top of that, thanks to its increasing focus on premium wines, the average export price for a case of its wine has reached USD28.80.

Purchase Vina Concha y Toro under 45.