World’s No. 1 copper producer Codelco is expected to seal a $1 billion investment deal with Britain Wednesday, which would open the door for UK suppliers to sell infrastructure to the Chilean state-owned miner.
Darryn Quayle, mining business specialist from the British government’s UK Trade & Investment department told Reuters the agreement is probably one of the first investments of its kind into mining from UK Export Finance.
The Santiago-based company, struggling with aging mines and depressed copper prices, is planning to sell about $8 billion of bonds over the next five years to help finance a nearly $30bn investment program and maintain its status as the world’s biggest copper producer.
“Codelco is in a make or break situation with its investments,” Chairman Oscar Landerretche said in a Monday interview in London during the annual LME Week industry gathering. “We’re going the full monty on the projects. If we don’t, Codelco disappears by 2030,” he was quoted as saying Tuesday by local paper La Tercera (in Spanish).
Landerretche also said that Codelco, which owns about 11% of the world’s copper reserves, will announce the results of an ongoing projects review in the coming months, including whether there will be any delays to its ambitious — but vital — multi billion-dollar growth plan.
Codelco has announced plans for turning the world’s largest underground copper mine, El Teniente (“The Lieutenant”), into an open pit operation.
The magnitude of Codelco’s planned overhaul is already evident at century-old Chuquicamata, the world’s biggest open pit copper mine, where the company has begun work on an 11-meter (36-foot) wide, 900-meter deep ventilation hole that will be the world’s largest, Nelson Pizarro, who took over as chief executive of the company in September, told La Tercera.
At the same time, Codelco has announced plans to open an open pit section at its El Teniente mine, the world’s largest underground copper operation.
Copper accounts for 60% of Chile’s exports and 15% of gross domestic product.
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