SANTIAGO, July 1 (Reuters) - Chile’s government said it will inject $225 million in capital into state-owned copper miner Corporacion Nacional del Cobre , known locally as Codelco, to help fund its ambitious investment plans.
The funds will come from Codelco’s 2014 profits, as the company gives all its profits to the state, the country’s mining and finance ministries announced in a joint statement on Tuesday evening.
Chile’s government last year committed itself to providing Codelco with $4 billion in state financing through 2018, including around $3 billion via treasury-issued debt and about $1 billion from returned profits.
It is partly capitalized by the Chilean government, but also finances itself by occasionally tapping debt markets.
Codelco “is going to have to issue debt because this isn’t enough,” Miguel Angel Duran, head of Universidad Central mining faculty, said on Wednesday.
Codelco has said it may issue debt this year depending on market conditions.
Its debt is rated A+ by Fitch Ratings and AA- by Standard & Poor‘s.
World No.1 copper miner Codelco has a five-year, $25 billion investment plan to revamp older mines and build new ones to keep production rising.
The government said it will evaluate during the second half of the year “how the investment plan has moved forward and will define how much additional capital (will be given) this year.” (Reporting by Fabian Cambero and Anthony Esposito; Editing by W Simon)