The UK has offered a $1bn loan guarantee to Chile’s state-owned Codelco with the intention of attracting business deals from the copper miner.

The agreement is likely to enable UK suppliers to sell infrastructure to the Chilean mining company and is part of the UK Government’s High Value Opportunities programme, aimed at boosting the country’s exports.

The investment deal will allow cooperation between UK businesses and Chile’s state-run enterprise on infrastructure, equipment sales and financial investments.

British Government’s Export Finance department chief executive David Godfrey was quoted by Reuters as saying: "It strikes me that Chile is a natural partner for us in the UK."

"It’s probably one of the first investments of its kind into mining from UK Export Finance." 

Mining business specialist from the British Government’s UK Trade & Investment department Darryn Quayle was quoted by the agency as saying: "It’s probably one of the first investments of its kind into mining from UK Export Finance.

"It shows the UK Government’s support for the mining sector."

As part of the deal, UK companies will be able to use government funding to sell infrastructure, such as rail lines or power plants or mining equipment.

In order to deal with declining copper prices and aging mines, Codelco is planning to sell about $8bn of bonds over the next five years to help finance a $30bn investment programme for upgrading its mines and counter falling production.

The company intends to spend $24bn in the next four to five years and a further $5bn over the next decade to increase annual output to about 2.5 million tonnes by 2025, up from the current 1.7 million tonnes.

Codelco chairman Oscar Landerretche said: "The Chilean state-owned producer will almost run out of copper by 2030 if it doesn’t invest billions of dollars at all of the company’s mines."