(Adds CEO comments on other projects)
By Anthony Esposito
SANTIAGO, Aug 28 (Reuters) - Codelco, the world’s No. 1 copper producer, said on Friday it was reworking a plan to expand its key Andina mine in the wake of a falling copper price and protests about the project’s possible impact on the environment.
The up-to-$7.5 billion expansion of Andina, located in the Andes mountains near the capital Santiago and close to the Argentine border, is one of the ‘structural projects’ that the state-run producer is relying on to keep its production flowing as output falls at its older mines.
“The project will be reformulated to generate an alternative that requires less investment, that implies less impact on the environment and which prolongs the useful life of the division for another 50 years,” said Codelco Chief Executive Officer Nelson Pizarro at a news conference following first-half results.
Codelco has faced criticism for the plan to expand Andina, which it has said may have an impact on a number of rock glaciers.
Andina will likely not be the only casualty of a copper price-induced re-examination of Codelco’s plans.
“We’ve taken some months to look at the health of our projects and some of them are okay but others need to go to the intensive care unit,” Pizarro said.
The company’s five-year $25 billion investment plan will be reduced, which will affect its future production stream, he said, without giving further details.
Codelco’s board and management team will tighten its belt and freeze pay raises, he added.
Codelco, like other copper miners, is struggling with prices at six-year lows that led it to report first-half profits down over 30 percent to $875 million.
It produced 831,000 tonnes of copper from its fully owned projects in the first six months of 2015, up 5.5 percent from 2014, boosted by new projects like Ministro Hales, it said.
A recent three-week strike by contractor workers hit production by a total of 17,000 tonnes, Pizarro added. (Writing by Rosalba O‘Brien and Anthony Esposito; Editing by Jeffrey Benkoe)