Codelco keeps $200 million in profits to revamp mines

Government-owned Codelco will keep $200 million from last year's profits to finance growth.

Announced on Tuesday, the funds were granted by Chile's government, which must decide annually how much to fund the miner. Codelco turns over all profits to the government.

The state-owned copper miner must compete for funding from the treasury, which is pressured to put more dollars into popular social programs.

Codelco has often been in a tug-of-war with the government over its investment budget. Of about $100bn in profits that Codelco has transferred to the state since it was nationalized in 1971, only $4bn has been returned back to the miner.

The mining company is undergoing a massive transformation, trying to maintain profits from the world's largest open-pit copper mine, Chuquicamata, by extending operations underground. At the same time, plans call for turning the world's largest underground mine, El Teniente, into an open pit operation.

Copper accounts for 60% of Chile's exports and 15% of gross domestic product.