Chile announces $200m funding for Codelco to refurbish aging copper mines

1 July 2014 (Last Updated July 1st, 2014 18:30)

The Chilean Government has announced that it will provide $200m of funding for the state-owned copper mining firm Corporacion Nacional del Cobre (Codelco), to support its refurbishment plans for aging copper mines.

The Chilean Government has announced that it will provide $200m of funding for the state-owned copper mining firm Corporacion Nacional del Cobre (Codelco), to support its refurbishment plans for aging copper mines.

The finance ministry was quoted by Bloomberg as making the announcement in response to Codelco's rolling three-year investment proposal, where it sought $25bn from the government.

The funding comes under the first part of the proposal and Codelco will be allowed retain $200m of the profits it generated in 2013.

"The government will send a bill to the National Congress in the third quarter to assure its long-term financing to the company."

However, the initial funding falls short of Codelco's first year requirement of $1.2bn, the news agency reported citing, an e-mail statement by the Federation of Copper Workers.

Codelco's investment plan includes a $6.8bn expansion of its Andina mine in Valparaiso, which is facing opposition from the locals due to the potential impact on nearby glaciers and water supply to the capital city of Santiago.

The Finance Ministry said in a statement that the government will send a bill to the National Congress in the third quarter to assure its long-term financing to the company, reported Reuters.

Meanwhile, the government noted that Codelco's financing will be linked to production and efficiency goals.

According to the ministry, Codelco is receiving government funding for the sixth time in 15 years. Earlier in 2013, the company was allowed to retain earnings from the purchase of Anglo American South in place of fresh funds.

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