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