SANTIAGO – Chile’s Codelco, the world’s largest copper producer, and its workers signed a pact Wednesday expressing their commitment to a series of strategic projects that are vital to the state-owned mining giant’s future, the company’s chief executive said.
CEO Nelson Pizarro said during the signing ceremony for the “Strategic Pact with Chile” that if these projects were not completed “Codelco would produce around 43 percent of current output by 2025 and 22 percent a few years later.”
Codelco, which by law gives all of its profits to the state, produces around 1.7 million tons of copper annually.
“We will cease to be the world’s leading copper producer very soon,” Pizarro said, noting that the strategic projects will modernize mining processes with a view to maintaining or increasing production levels.
Those projects, which include converting its open-pit Chuquicamata mine into an underground mine, developing a new mine level at El Teniente and expanding its Andina mine, among other plans, are expected to require an investment outlay of $25 billion.
Amid a context of lower copper prices, Codelco in recent days announced a reduction in its 2015-2019 investment program to $22 billion, down from an original level of $25 billion, although it cautioned that its strategic projects were untouchable.
The copper giant has begun laying off employees due to a decline in revenues and net income, although the work force reductions have thus far only affected executive and supervisory staff.