UPDATE 2-Chile's government to give $600 million to Codelco

miércoles 28 de octubre de 2015 16:22 GYT
 

(Adds comments from Finance Ministry, Codelco)

By Anthony Esposito

SANTIAGO Oct 28 (Reuters) - Chile's Finance Ministry said on Wednesday it will give state-owned copper miner Codelco $600 million to finance its investment plans.

Codelco, the world's largest copper miner that was nationalized in the 1970s, gives all of its profits to the Chilean government, and is funded in part by the return of some profits and by issuing debt.

"This capital contribution will be financed with resources from the Treasury, which come from debt issued by the Republic," the Ministry said.

"Taking into account Codelco's updated 2014-2018 business and development plan and the company's plans to adapt its investments to fit the current economic scenario and its efforts to rein in costs, a decision was made to give Codelco a capital injection that will allow it to maintain its healthy financial standing," it added.

Codelco is re-examining its investment plans in light of a sharp drop in copper prices and has said it will delay some projects and redesign others. But it underscored that it will not abandon key projects it says it needs to keep production flowing.

It plans to invest up to $22 billion over the next several years, some $3 billion less than initially planned, to revamp ageing mines and build new ones to counteract falling ore grades and maintain copper output.

"These funds, plus the September bond issue, allow us to secure financing for this year and next year, considering our adjusted investment plan," said Codelco Chief Executive Officer Nelson Pizarro.

In September, Codelco placed a 10-year bond, raising $2 billion.

The government previously injected $225 million in capital into Codelco in July, funds which came from the company's 2014 profits. (Reporting by Anthony Esposito; Editing by Jeffrey Benkoe and Lisa Shumaker)