(Adds comments on spending, debt, labor talks)
By Rosalba O’Brien and Fabian Cambero
SANTIAGO, April 4 (Reuters) - After a tumultuous period of falling copper prices and heavy cuts to its investment plans, Chile’s Codelco has stabilized and its levels of debt and spending will likely stay steady in coming years, its chairman told Reuters on Tuesday.
State-run Codelco, which recently lost its global copper production top spot to Freeport-McMoRan Inc, has said it needs to spend $18 billion over the next five years to revamp its aging mines and remain a major player.
That figure could be trimmed, but significant cuts to its investment plan or a rise in its debt level were not on the cards, Oscar Landerretche said in an interview during the CRU World Copper Conference.
“We now have a situation with costs lower than before and below the industry average, a credible program of projects, and with (steady) debt,” he said.
Codelco hands its profits to the state and is funded by a mixture of government refinancing and debt.
“If the government continues capitalizing us as it has in the last three years and prices and conditions don’t change, we don’t think it will be necessary to increase total debt to continue investing,” he said.
Landerretche did not rule out a new issue to help improve its debt profile, but said it did not plan to raise debt from its overall level of around $14 billion over the next four or five years.
At that point, its project revamp should start to bear fruit and allow it to begin paying down what it owes, he said.
Expenditure on that revamp has already been cut from $25 billion, and room for maneuver now was limited, said Landerretche.
“All the team is putting pressure on to make projects cheaper...something more could be cut but it’s increasingly harder,” he said.
Speakers at CRU this week spoke of the need for Chile’s industry to deal with evolving challenges in productivity, technology, and labor.
While acknowledging that Chile had lost ground in some areas, not all applied to all copper miners the same way, said Landerretche. For instance, he said Codelco was already following many provisions of a labor reform that became law in Chile this week and factored in a record strike at Escondida mine last month.
A wage contract with its Chuquicamata mine union was settled late last year and Codelco does not expect major obstacles at El Teniente, whose contract is due at the end of 2017, said Landerretche. (Reporting by Rosalba O’Brien and Fabian Cambero; Editing by David Gregorio)