Chile gives copper giant Codelco much-needed $225 million cash injection
Mining , 3 Jul 2015 12:05
(Minews) - Chile-owned Codelco, the world’s top copper producer, has been promised $225 million by the government to help the company fund its ambitious $25 billion investment plan aimed at expanding its aging operations and build new ones to keep production rising.
The cash injection, said the miner in a statement (in Spanish), will come from the company’s own 2014 profits, since the miner gives its profits to the state.
In October last year, President Michelle Bachelet enacted a special law to spur the output of the state-owned copper giant, which allowed the government to commit to provide Codelco $4 billion in financing through 2018, including around $3 billion via treasury-issued debt and about $1 billion from returned profits.
“Codelco is in a make or break situation with its investments,” Chairman Oscar Landerretche said said last year. "We're going all in with the projects. If we don't, Codelco disappears by 2030," Landerretche warned.
The miner holds vast copper deposits, accounting for 9% of the world's known proven and probable reserves and about 11% of the global annual copper output with 1.8 million metric tons of production.
Copper accounts for 60% of Chile's exports and 15% of gross domestic product.
The government said it would evaluate during the second half of the year "how the investment plan has moved forward to define how much additional capital (will be given) this year."
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