LONDON, Oct 22 (Reuters) - Britain offered up to $1 billion in loans and guarantees on Wednesday to support UK business deals with the world’s biggest copper producer, Chile’s state-owned Codelco.
The agreement is aimed at stimulating deals between UK companies and Codelco including building infrastructure such as railways, selling mining equipment or making financial investments.
“It strikes me that Chile is a natural partner for us in the UK,” said David Godfrey, chief executive of the British government’s UK Export Finance department.
He presented a letter outlining the $1 billion potential line of credit to Aurora Williams, Chile’s minister of mines, at a presentation in London during London Metal Exchange Week, the biggest global gathering of the industrial metals sector.
“I would invite you to look at Chile, and the mining industry,” Williams said.
In addition to guaranteeing bank credits for UK firms involved in export deals, UK Export Finance has recently been allowed by the chancellor to make direct loans itself, Godfrey said.
“The investment programme is a big challenge,” Ivan Arriagada, chief financial officer of Codelco, told the presentation.
Codelco needs to invest roughly $30 billion to upgrade its mines and counter falling production in the next few years. Its chairman told Reuters on Monday the firm would announce the results of a projects review in coming months.
Under the growth programme, Codelco should boost production to some 2.5 million tonnes per year in 10 years time and then settle at 2.2-2.3 million for another two decades or more. This compares with production currently of about 1.7-1.8 million tonnes a year.
The $1 billion credit line marks one of the first initiatives in mining by UK Export Finance, which has mainly focused in the past on oil and gas, aerospace and defence sectors, an official said.
The $1 billion deal is part of a new British government initiative, the High Value Opportunities Programme, which is aimed at boosting UK exports, said Darryn Quayle, mining business specialist from the British government’s UK Trade & Investment department. (Reporting by Eric Onstad; editing by Susan Thomas)