SANTIAGO – The Chilean government said on Wednesday it was injecting $600 million in capital into Corporacion del Cobre, or Codelco, the world’s largest copper mining firm, to allow it “to maintain a healthy financial position.”
The capital infusion will come from Treasury bond sales, the Finance Ministry said in a statement.
This is the first tranche of an up to $3 billion capital investment authorized by law, the ministry said.
Future funds for the state-owned mining company “will depend on the progress and profitability of its projects,” Finance Minister Rodrigo Valdes said.
“Future capital investments will depend, exclusively, on the progress and profitability of projects,” Valdes told reporters. “Price is relevant to returns, but it is not the only thing that matters.”
Earlier this week, Codelco said it planned to cut investment by up to $4 billion.
Codelco’s management said the investment cuts were a response to the drop in copper prices, which have fallen about 18 percent since January.
Codelco is the world’s largest copper mining company, producing 1.84 million tons of fine copper, or 10 percent of total world output, in 2014.
Revenues from copper sales are crucial for the economy of this South American country of 17.6 million people.