SANTIAGO, Jan 25 (Reuters) - Chilean state copper miner Codelco’s multi-billion dollar investment plans have not been put at risk by the sharp drop in prices for the metal, the company’s chief executive officer told La Tercera newspaper in an interview published on Sunday.
Codelco, battling falling ore grades at its decades-old flagship mines, is seeking to implement an ambitious $27 billion multi-year investment plan to open new projects and revamp older ones.
“The continuity of the projects is not under threat. Mining is a long-term business and as such Codelco’s investment plans are defined and evaluated in terms of the expected performance of prices and other variables over the medium and long term,” said CEO Nelson Pizarro.
Copper prices fell on Friday, posting their sixth straight weekly loss as they moved back towards a recent 5-1/2-year low, weighed down by a stronger dollar and concerns about the outlook for demand from top consumer China.
“Codelco’s average direct cash costs are below the prices observed,” Pizarro said.
For Codelco, the silver lining to falling commodities prices is a reduction in direct and indirect costs due to the drop in oil prices, Pizarro said.
According to him, if current oil prices hold steady, Codelco should see direct cash costs savings of around $200 million annually, and another $80 million to $100 million in indirect cash savings per year. (Reporting by Anthony Esposito; Editing by Michael Urquhart)