Codelco reduce their costs by 11% and retakes contacts with government funded
Thomas Keller, Codelco’s CEO said they are “responsibly optimistic” about a possible change in Executive’s position on providing resources to the company. Parliamentary offensive considers to use resources from the FEES
The chapter of the capitalization of 2012 earnings and, following this, the dispute between Codelco and the government are far from over.
Although Treasury has been adamant in defending the formula chosen by the Executive to support the 2013 investment plan of the state Company-consisting of the authorization to capitalize U.S. $ 1,000 million, although accounting and fresh- Codelco has had in recent days some direct and indirect contacts to let the government know how necessary are these resources to realize its structural project plan, and has a cost of about U.S. $ 30 billion.
Therefore, different signals are sent to La Moneda. One of them, perhaps the most powerful, is the drop in costs during the second quarter, which deepened the fall already observed the first quarter, with an average reduction of 11% in the period January to June compared to the same period , 2012. This is the second quarter downward trend. So while Codelco’s copper pound to be produced will cost U.S. $ 2.64 last year, this year cost descended to U.S. $ 2.36. Since the first quarter a cost reduction has being seen, which in the corporation attributed to improvements in management, exchange rate factor and others.
This is added to U.S. $ 1,000 million cut in its investment plan for this year, which will be made without touching structural projects, which continue their march as defined.
Next year should lower costs even further as a electric-fixed price contract will be effective with Colbún today pay marginal cost, which in June scored a record-and enter Ministro Hales mine.
Can Be
“We are by nature extremely optimistic at Codelco. We always have a positive and favorable vision, “said shortly corporate executive President, Thomas Keller, when asked if the company has closed the chapter on capitalization of profits or expected to be any change in the government’s position on this subject.
Key to this point has been the Parliament, in particular the mining and energy committees of both houses. Among representatives and senators there is consensus that Codelco should receive part of the revenue generated last year for not affecting its debt or risk classification, nor compromise the structural realization of their projects.
From there have emerged ideas of how to use part of the resources of the Social and Economic Stabilization (FEES), which would allow the Treasury to deliver resources to Codelco without generating a deterioration of the fiscal accounts.
All this is being analyzed by the executive, while they are looking carefully the proposals made by parliamentarians to establish a multi-year funding for the copper company, but linked to results in terms of productivity and costs.
Through Mining Minister Hernan de Solminihac, the executive has been in favor of supporting the creation of a formula to create a permanent financing plan for major public companies in the country.
Another alternative is to cash assessment of additional percentage rid Acrux, society through which Codelco owns a minority interest in Minera Los Bronzes, in partnership with Mitsui.
Source: Pulso
