Codelco removes CEO Keller after clash over cost cuts

Codelco removes CEO Keller after clash over cost cuts

Chilean state-owned Codelco, the world’s No.1 copper producer, has decided to remove Chief Executive Officer Thomas Keller and seek new leadership at a critical time for the company.

The decision, made by the board late Thursday’s night (in Spanish), was something that many saw it coming as Keller has recently clashed with some directors over cost-cutting and expansion plans.

Keller, a former retail executive, had been commended for his efforts to overhaul old mines and cut costs at Codelco, but his tough style triggered tensions with the company’s powerful unions, according to opposition-run newspaper El Mercurio (in Spanish).

The board stressed Keller’s removal, seen as close to the right, was not politically motivated. Critics such as former deputy minister of mining under president Sebastian Piñera, Francisco Orrego, differ:

Codelco removes CEO Keller after clash over cost cuts

His departure comes as President Michelle Bachelet’s government considered his plan to raise output and increase investments by more than $20 billion this decade. Without the spending, Keller said in January, output would drop by more than half.

I have a very clear vision and I’m not convinced that that vision is shared by the board,” Keller said in an interview with El Mercurio (in Spanish) published Thursday. “What we have now in terms of workforce, health benefits and pay isn’t consistent with the profitability promises we made,” he told the newspaper, referring to the company’s century-old Chuquicamata mine.

Keller will remain in its position until Friday, June 13. According to newly appointed board head Oscar Landerretche there is no obvious candidate to become Codelco’s next CEO, but learned last month Bachelet’s government is considering the nominations of Nelson Pizarro and Sergio Jarpa, both former Codelco executives.

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

Image courtesy of Codelco, via Flickr

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