Chile's Codelco says unlikely to get profits to reinvest this year
SANTIAGO Oct 14 (Reuters) - Chile's state-owned copper miner Codelco said it will likely not get back any of its profits from the government this year and will have to rethink or delay expansion projects after lower metal prices weighed on its earnings.
The world's largest copper miner, which was nationalized in the 1970s, gives all its profits to the Chilean state, and is funded in part by the return of some profit and in part by issuing debt.
"Due to the sharp drop in the copper price it is very likely that despite generating profits for the treasury thanks to an aggressive cost reduction plan, all of the profits will be handed over via taxes and as such no profits will be retained for the present year," Codelco said in a statement posted on its website late on Tuesday.
Codelco is re-examining its investment plans in light of the copper price fall and has said it will delay some projects and redesign others, but it underscored that it will not abandon the key projects it says it needs to keep production flowing.
It has estimated those projects will cost some $25 billion over five years. Some $225 million was due to be returned to it from its profits in 2015.
On Monday, Chile's mining minister told Reuters that the government is not planning for now to give more funds to Codelco, after already pledging $4 billion until 2020. (Reporting by Anthony Esposito; Editing by Andrew Hay)
© Thomson Reuters 2016 All rights reserved.