Codelco’s investment plan will depend on the capitalization authorized by the Government
The Company chose not to make public its 2014’s investment budget before receiving approval from the State and determine whether or not receive resources to fund its plan.
As we approach the end of the first quarter of 2014, Codelco not yet fully defined its investment plan for this year.
The company submitted a proposal to the Government, which is being analyzed by the Treasury and Mining authorities, acting as representatives of the owners of the state company. It is not only including investment plan, but funding requirements are also detailed.
Today the company maintains a debt ratio of 1.69 times its equity, which represents an increase of about 6% versus 2013. In order to further increase this indicator is needed routes other than debt financing, for example, that the state would authorize the state company to capitalize on some of their surplus, which in 2013 reached U.S. $ 3,889 million.
Therefore, the Codelco’s idea is waiting approval from the government before giving the go-ahead to plan 2014, something unprecedented considering that until 2013 was reversed: first investment was defined and then waiting for the decision of the Executive on resources for funding.
What happened last year forced to change strategy. Now, the company is seeking to avoid making changes on the fly, which was forced Codelco to do last year when treasury, then led by former Minister Felipe Larraín, decided to capitalize on financial resources and not fresh to the company. Thus, the state company lowered its forecast for 2013 from investment around U.S. $ 5,000 million announced earlier this year to U.S. $ 4,178 million.
“The investment plan is defined in the context of a three-year plan that the Board of Directors presented to representatives of the owner, who are the ministers of Mining and Treasury, which is an investment and financing plan. This is a document that is sent for consideration on March 31st. It is in the process of being taken by the authorities understanding (…). Not applicable to discuss that publicly before the authorities become aware of those figures.-
Is in the range of what we have planned and it has to do with the implementation of structural projects. We prefer to expect the authorities know and analyze in detail its contents, “said chief executive of mining, Thomas Keller, when delivering results in the corporation. “Structural projects are critical, so they need finance and we expect to happen. We’ve only talked (about capitalization) in general. The Minister made some statements and I think now they have the word “said about it the chairman’s copper company Gerardo Jofre.
“The new government is already being installed, it’s doing at full speed and we have not discussed these issues yet,” said the Codelco’s helmsman table.
Less Costs
The company on Friday filed its balance sheet for the year, which highlighted a significant reduction in costs. According to Jofre, this will remain a priority in the coming months, especially with the decline in the price of copper fell from $ 3 per pound.
“Codelco, as the whole country knows, needs structural development projects at this stage to foresee a scenario of long-term positive for copper. We must make significant investments and must take great care costs. We are more concerned about the price than the costs. Costs is what we can manage more. In recent years the cost of all global mining, Chilean mining and Codelco’s mining and have gone up a lot and we are several years working to contain the rising costs, “said Jofre.
Total costs and expenses of the corporation was reduced 12.5% in 2013, due to a higher savings in inputs and services and better management. For this year, the company plans to further cut this item to a low of U.S. $ 400 million.-
Source: Pulso
