Codelco will invest US$ 3 billion annually over next five years

The Chilean state-owned company invested US$ 2.1 billion in 2009, despite the financial crisis, an amount that will increase in 2010 to ensure the viability of medium- and long term projects.

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Codelco, the largest state copper company in Chile and the world, has revealed an ambitious investment plan to surpass the record levels of 2009, when they totaled US$ 2.1 billion.

The company’s CEO José Pablo Arellano revealed this news to the ninth World Copper Conference currently being held in Chile, where he also said that “this year we will invest even more” and confirmed that the amounts in question are around US$ 34 billion “during each of the next five years.”

In addition, Arellano took advantage of the occasion to highlight the projects that the copper company will be implementing in the next 30-40 years, several of which he hopes will begin operations in the medium term.

“Codelco has proven its capacity to materialize all of its projects and I am sure that this will continue to be the case for the next 3-5 years, commissioning Mansa Mina in the north, converting Chuquicamata into a subterranean operation, taking El Teniente to a new level of operations, and developing a major seam in the Andes Mountains at Andina,” he explained.

Thus, it is estimated that Mansa Mina, for example, could begin operations in 2014. “We are working to complete investments ahead of our original schedule. We are moving ahead as quickly as possible and we hope to begin operating this project in early 2014, or even sooner,” Arellano said.

“For its part, Andina will not be ready in 2016, as initially projected, because the location of the plants has to be resolved. There is no delay; the project is in the engineering phase and that is moving ahead. The date for completing investments will be determined when this has finished, but it will be in 2017 or 2018, depending on the results,” he added.

Future of the company

Arellano expressed his confidence that high demand for copper and high prices for the red metal will continue in the medium term, especially thanks to strong growth in China and emergent Asian economies, where demand is expected to be very significant.

“Those countries are going to continue to grow and are going through a stage in their development that is very intensive in copper use for construction, the development of energy infrastructure, and industry,” he said.

When asked about the chance that the company’s capitalization might be affected by the earthquake last 27 February, Arellano said that this will not be the case, since the company is financed with its own resources and also with the reinvestment of profits, which have totaled US$ 1.9 billion over the last four years.

“I am certain that in the coming three-to-five years we will also reinvest profits. Their precise distribution during this year and the coming years must fit in with other fiscal policy objectives, which include the reconstruction program,” he detailed.

It is worth noting that to ensure the sustainability of this resource and new markets for it, over the last few years the company has entered into partnerships with other Chilean state institutions to undertake projects to find alternative uses for the metal, as is the case with antibacterial copper and fish cages, an initiative that will be presented in China soon.

This post is also available in Spanish