Chilean Finance Minister Felipe Larrain has reportedly revealed plans to invest $1bn of funding into state-owned copper miner Codelco.

Codelco has been seeking financing from the government to fund its $39bn, ten-year overhaul of its mining operations, Reuters reported.

The state-owned firm is expected to use the financing to maintain production despite falling ore grades at major deposits in the country.

“It is important that Codelco carries out this investment programme because if it does not invest, its mines will run dry.”

Larrain said: “It is important that Codelco carries out this investment programme because if it does not invest, its mines will run dry.”

He stated that around $500m would be made available to the company immediately, while the remaining amount would be paid by February next year.

The financing comes at a time when several of Codelco’s planned projects, including at the El Teniente y Chuquicamata mine, are facing technical hurdles, resulting in escalated costs.

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The state is the recipient of all of Codelco’s profits and arranges funding through capitalisation and debt, reported the news agency.

Last year, the company received a capital injection of $520m in December and $475m in April.

Codelco’s production last year stood at 1.84 million tonnes, while total revenues and gross profit were $14.64bn and $4.26bn.

The company, which is estimated to have mineral resources for at least the next 70 years at existing production rate, exports 40% of its products to China.