Chile: investing in its mining future
Published 13 August 2014
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This publication was archived on 4 July 2016
This article is no longer current. Please refer to Overseas Business Risk – Chile
Detail
The Chilean Government announced on 1 August that the National Copper Corporation of Chile (CODELCO), the world’s largest copper producer will receive US$ 4 Billion in state funding in order to capitalise the state owned miner during 2014 to 2018. $3 billion will come from Treasury-issued bonds and the remaining $1 billion from reinvestment of the company’s profits. This is a record level of investment in CODELCO reinforcing the Government’s commitment to Chile’s most important sector.
CODELCO currently produces 1.6 million tons of copper a year, most of which is exported to China, but plans to increase production to 2 million tons a year by 2025. The $4 Billion in state funding will help the company achieve its $23 billion investment plan to overhaul its ageing mines. Finance Minister Alberto Arenas said that CODELCO’s ability to continue generating net income for the national government “crucially depends on the timely execution of its structural projects”.
In early August, the company also named Nelson Pizarro, as its new CEO. Pizarro, will take over in September. He has five decades of experience in the industry as a mining engineer and served as a regional CODELCO Vice President.
Comment
This is a timely and necessary investment that will strengthen Chile’s position in the mining sector. It opens further opportunities for UK companies that are engaging with our mining HVO. Chile is looking to improve production, in particular ore extraction methods, water and energy usage, cut costs, and strengthen environmental management and community relations.
Disclaimer
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