SANTIAGO – Chile’s government will inject $1 billion in “extraordinary” capitalization into state-owned copper miner Codelco to help it fund an ambitious plan aimed at upgrading its aging mines and dealing with dwindling ore grades, Finance Minister Felipe Larrain said on Friday.
Codelco [RIC:RIC:COBRE.UL] produces nearly 10 percent of the world’s known proven and probable reserves and about 11% of the global annual copper output with 1.8 million metric tonnes of production. The miner is planning a 10-year, $39 billion total overhaul of several of its operations.
The country’s mining minister, Baldo Prokurica, said the backing was essential for Codelco to keep up production numbers and so remain as the world’s No.1 copper miner, Diario Financiero reports (in Spanish). Half the funds would be dispersed immediately and all would be paid out by February next year, the minister added.
Titular del @Min_Hacienda @felipelarrain junto a su par de la cartera de @MinMineria_cl y presidente de @CodelcoChile anuncian capitalización de Codelco por US$1.000 millones. “Esto es solo capitalización extraordinaria”, explicó el ministro Larraín. pic.twitter.com/oUq3mBNKLB
— Min. Hacienda Chile (@Min_Hacienda) June 29, 2018
In March, the company received environmental approval to build a $1 billion desalination plant, which will be used to supply water to its operations in the country’s northern region.
The facility, the second-largest desalination plant in the South American country after the one that supplies BHP’s Escondida, will allow Codelco expand its Radomiro Tomic mine.
Last year, the state-owned miner delivered $3 billion in profits to Chile’s coffers, accounting for 16 percent of the South American nation’s exports and more than one-third of its copper production.