12 de octubre de 2015 / 13:06 / en 2 años

LMEWEEK-No more funds for Chile copper producer Codelco for now - minister

* Government has pledged $4 bln until 2020

* Codelco needs $25 bln for investment over five years

* Minister expects higher Chile copper output in 2016 (Adds more quotes, details)

By Olivia Kumwenda-Mtambo and Angus Berwick

LONDON, Oct 12 (Reuters) - Chile’s government is not planning for now to give more funds to state-run copper producer Codelco, the world’s No.1 supplier of the metal, having already pledged $4 billion until 2020, its mining minister told Reuters on Monday.

Codelco, though, has said it needs to invest $25 billion over five years to dig deeper at new and existing sites and keep production flowing.

“At the moment what is important is that Codelco is sufficiently capitalised from year to year,” Mining Minister Aurora Williams said on the sidelines of LME Week in London.

“Over the five years the amount cannot exceed $4 billion, since this is what is established in a law passed by the Chilean congress.”

Codelco hands it profits to the state, and is funded in part by the return of some profit and in part by issuing debt. But with copper prices at a six-year-low, the cash-strapped government has so far promised just $4 billion in returned profits between 2015 and 2020.

The government has pledged billions of dollars for an overhaul of the education system and other social initiatives and is reluctant to promise more funds to Codelco at a time when the economy is struggling.

Williams said the only condition for Codelco to receive the funds from the government was that its mining projects “keep advancing”. She added it was too early to say how the government plans to help Codelco beyond the five-year period.

Mining firms globally have been hit hard by a slump in metal prices, mostly due to an economic slowdown in China, which accounts for half of the world’s copper demand.

Copper makes up over half of Chile’s exports, leaving it more exposed than other Latin American economies to China.

Williams said she expected some producers to exit the market, which would help lift prices that have roughly halved from a 2011 high.

“We are not going to return to prices seen during the super cycle, the recovery will be slow,” she said. “We hope that by the first quarter of 2017 the copper price will rebound to an average of $2.5 (a pound).”

Benchmark copper on the London Metal Exchange was up a percent at $5,323 per tonne at 1230 GMT on Monday. It hit a record high above $10,000 per tonne in 2011.

Williams said Chile’s copper output was expected to be steady at 5.8 million tonnes this year, with production seen rising by 3.8 percent in 2016. (Reporting by Olivia Kumwenda-Mtambo and Angus Berwick; editing by Susan Thomas)

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