Chile’s Codelco, the world’s largest copper producer, has signed
a 10-year loan with Export Development Canada, the country’s export credit
agency, which will allow the state-owned miner to access $300 million to
finance an ambitious overhaul of its aging mines.
The copper giant, which produces nearly one-tenth of the
world’s supply, is in the midst of a $39 billion,10-year plan
to expand and upgrade its mines.
Last year, the company began $5.6 billion conversion of its century-old
Chuquicamata open pit mine into an underground operation.
The next major mine overhaul is a new level at El Teniente
underground mine, the company’s largest.
Those and other projects are expected to help Codelco keep
production rates, despite falling ore grades and increasing costs at its
assets.
The company, which hands over all of its profits to the
state, holds vast deposits of the red metal, accounting for over 10% of the
world’s known proven and probable reserves.
Production decline, together with lower copper prices and
higher costs, saw the company’s annual profits drop by a third last year to $2
billion, not counting paper losses worth almost $400 million, as it wrote down
the value of its assets, including its Ventanas smelter and the open pit at its
Salvador division.
In July, Codelco named company insider Octavio Araneda as
its new chief executive officer, following the departure of Nelson Pizarro.
Together with carrying forward the revamping of the company’s
mines, Araneda is expected to deal with major corporate modifications Sebastian
Piñera’s administration has promised, including legal changes to prevent the
nation’s armed forces from using Codelco as a cash cow to finance weapons
purchases.