By Paul Ploumis (ScrapMonster Author)
October 29, 2015 06:34:12 AM
State-owned Codelco has received $600 million from Chilean government, this being the first installment of the authorized $3 billion funding.Copper giant Codelco receives $600 million government funding
SANTIAGO (Scrap Monster): The Chilean government has decided to grant $600 million to the state-owned copper major Corporacion del Cobre (Codelco) to finance its investment plans. The Chilean Finance Ministry in a statement issued Wednesday noted that the amount will be the first installment of $3 billion authorized under the new funding mechanism for the company.

Earlier, during the week, Nelson Pizarro, CEO, Codelco, had presented before the Chilean authorities, a revised investment strategy, taking into account, the sharp drop in copper prices. Incidentally, copper prices have fallen to six-year lows. The prices have dropped by 17.7% since January this year.

As per the new plan, Codelco plans to invest up to $21 billion- $22 billion over a period of next several years. The above sum will be utilized to reinstate ageing mines and to construct new mines, so as to maintain the copper output at current levels. Initially, the company had planned investments of around $25 million, but has later decided to cut back the expansion works at its Andina division. The projects listed in the new plan also include underground operation at Chuquicamata and expansion works at El Teniente mines.

According to Rodrigo Valdes, Chilean Finance Minister, Codelco has made significant efforts to cut costs drastically over the past several months. The grant reiterates that the government still believes in the company and its efforts.

Codelco is the world's largest copper mining company, producing 1.84 million tons of fine copper, or 10 percent of total world output, in 2014.