Chile passes historic law to aid copper giant Codelco
Chilean President Michelle Bachelet has enacted a law to spur the output of state-owned copper giant Codelco, which will receive special capital contribution of US$4 billion between 2014 and 2018.
The law, which was approved by both houses of parliament last week, is essential for Codelco —the world’s No. 1 copper miner— to maintain current output levels in light of declining ore grades at its aging mines, with a long-term aim of increasing annual output to above 2 million metric tons.
"We are making a historic effort to spur Codelco, the world leader in copper production, to strengthen its growth, productivity and efficiency," Bachelet said at Codelco's headquarters in Santiago.
The corporation also planned to invest more than $23.5 billion over the next five years to expand operations.
The added investment is expected to generate an average of 31,000 direct and indirect jobs every year through 2023.
"If we don't invest, Codelco's annual output would fall from 1.7 million tons today to approximately 700,000 tons," warned Bachelet during the signing of the law (in Spanish).
"It would be tremendously irresponsible to have our arms crossed, watching how Codelco's global leadership eroded and how its profits, namely Chile's wages, fall," she added.
Bachelet’s centre-left government has been taking a close look to the mining sector in a bid to support an industry that is crucial for the country's economic growth. Authorities recently called a 60-day review of ministerial permitting processes, with a view to improving efficiency while still protecting the environment.
Codelco holds immense copper deposits, accounting for 9% of the world's known proven and probable reserves and about 11% of the global annual copper output with 1.8 million metric tons of production.
Copper accounts for 60% of Chile's exports and 15% of gross domestic product.
Images courtesy of Codelco.