UPDATE 1-Chile's Codelco implements cost-cutting measures to confront copper slide

jueves 14 de enero de 2016 12:03 GYT
 

(Adds CEO Pizarro's comments, background)

SANTIAGO Jan 14 (Reuters) - The chief executive of world No.1 copper producer Codelco said on Thursday that the Chilean state-owned miner will implement new cost-cutting measures to save $574 million in 2016 as the sector reels from a steep slump in metals prices.

Pizarro said Codelco was aiming for cash costs of $1.255 per pound this year, versus the $1.386 in 2015.

"Our commitment is to do everything possible to control our costs, and generate a reduction of 13.1 cents per pound (in cash costs)," said Pizarro.

In recent months, Codelco has already laid off workers, scaled back the size and investment needed at some of its projects, and implemented other cost-cutting measures.

Codelco, which hands over all of its profits to the state, is seen posting pre-tax profits of $703 million and producing 1.704 million tonnes of copper in 2016, said Pizarro.

The company is seeking to implement an ambitious $22 billion multi-year investment plan to open new mine projects, like Ministro Hales, and revamp older ones, such as Chuquicamata, where output is declining.

Copper hit 6-1/2-year lows on Thursday on concerns a spike lower in the oil price foreshadowed weaker global economic growth, but a recovery in Chinese shares helped limit losses.

Chile's state copper commission Cochilco on Thursday forecast average copper prices of $2.15 per pound for 2016 and $2.20 per pound in 2017.

"We believe that $1.98-$1.99 per pound is the point at which (copper prices) should rebound," said Pizarro. (Reporting by Fabian Cambero; Writing by Anthony Esposito; Editing by Chris Reese)