Copper giant shortlists candidates as CEO ponders future

Chile’s new government is looking for candidates to lead state-owned Codelco, the world’s largest copper producer.

While Nelson Pizarro could well stay on as chief executive officer even after Chilean President Sebastian Pinera’s administration appoints a new chairman in May, the government is putting together a shortlist of candidates, Mining Minister Baldo Prokurica said in an interview Tuesday.

“There’s people from Codelco and people from outside Codelco — we are scouring for the best,” he said. “Whoever replaces Pizarro needs to have deep knowledge of Codelco’s way of doing mining and good negotiation capacity with unions.”

The CEO will need to oversee a $20.8 billion-plus investment plan through the next four years while keeping debt levels in check and securing funding from the government. The spending plan includes major upgrades designed to maintain production levels in the company’s key divisions, including Chuquicamata and El Teniente.

In January, Pizarro said he would consider remaining in the role but he’d have to discuss it with his family. On Wednesday, Pizarro told reporters that the next CEO should come from within Codelco to maintain continuity. Outgoing Chairman Oscar Landerretche has called for the soft-spoken septuagenarian whose nickname is “ scissor-hands” to stay on to maintain the company’s focus on cutting costs and rationalizing projects.

Local media including La Tercera, Mostrador and Pulso have reported the following contenders to lead the state behemoth:

Jorge Gomez: Collahuasi CEO, former vice-president of Codelco’s southern divisions Ivan Arriagada: Antofagasta CEO, former Codelco CFO Andre Sougarret: Codelco’s El Teniente division general manager, known for leading the rescue of the 33 trapped miners in 2010 Jose Robles: Codelco vice-president of productivity and costs Alvaro Aliaga: Codelco vice-president of operations, former general manager at El Teniente and former Chuquicamata underground project manager NOTE: Codelco and Antofagasta executives declined to comment, while Gomez didn’t immediately respond to requests for comment made through Collahuasi

The new government wants to further shield Codelco from political cycles by improving funding mechanisms and corporate governance, the minister said.

Authorities will work on a long-term funding policy to allow the management team to better plan projects, he said. In 2014, former President Michelle Bachelet signed a law pledging to invest as much as $4 billion in the company, between state funds and reinvested earnings. In total, her government invested $2.3 billion.

"Profitable projects that are high-quality from an engineering point of view will surely have financing," Prokurica said. "We should have a clear and long-term financing policy for Codelco, which doesn’t necessarily mean more resources."

No Privatization

Changes to corporate governance could include appointing more board members and dividing directors’ responsibilities between the northern and southern divisions. The new administration is looking to send a Codelco governance bill to Congress in the first half of this year, Prokurica told reporters on Wednesday.

The government may make another attempt to change a law that requires Codelco to hand over 10 percent of its sales to the armed forces. Pinera sought to scrap the military funding in his first term, but the bill remains in Congress. “It could be among the priorities, but there’s no urgency,” the minister said.

Privatizing the company, or a part of it, isn’t in Pinera’s program, Prokurica said.