Sep 13, 2011 SANTIAGO (Dow Jones)--Chilean state copper company Corporacion Nacional del Cobre, or Codelco, won't have problems selling the copper it produces despite brewing fears about global growth, the company's chief executive Diego Hernandez said Tuesday.
Daily paper El Mercurio recently reported that some of Codelco's clients asked to cancel orders as concern grows about debt and low economic growth in the U.S. and Europe.
"We've had some clients asking to reduce their commitments for the second half [of 2011], while others have asked to increase them, so our sales plan remains the same...we're not really worried about selling our copper during the second half," Hernandez told reporters at the company's quarterly earnings presentation.
The interview with a company executive, which the El Mercurio report was based on, was "taken out of context," he said.
Codelco will have a better pulse of copper demand for next year after it begins negotiating its sales contracts in October following the annual London Metal Exchange Week in London.
Either way, softer-than-expected copper demand and lower-than-anticipated red metal production around the globe this year have "evened each other out...and supply and demand dynamics remain tight," Hernandez said.
Regarding Codelco's $3.2 billion investment plan this year, part of its broader plan to invest around $17.5 billion through 2015 to expand output, the company already has the funds to finance it and won't need to seek further debt.
To finance its 2011 investment plan, Codelco sold its 40% stake in power producer E-CL SA (ECL.SN) for $1 billion earlier this year and was allowed to retain 20% of last year's pretax profit. It also has more than $1.5 billion in amortization and depreciation.
"Next year's investment plan is higher than this year's and we're studying when the best moment to come out to the market to increase our debt will be," said Hernandez.
Ratings agency Fitch in February upgraded Codelco's foreign currency debt rating to A-plus from A following a $1 billion, 10-year bond issue in late 2010.
Codelco is the world's biggest copper mining company. With an annual output of around 1.7 million metric tons of copper, Codelco produces 11% of the world's copper.