Government tuned formulas for permanent capitalization of Codelco
Minister of Mining, Aurora Williams explained that she already raised a proposal to the IRS to establish a multiannual plan for the delivery of resources to the state company. In addition, the government will define in coming days continuity of mining’s CEO.
A permanent capitalization plan with goals known on cost and productivity and allow to develop a medium and long term investment program, as mining needs. This longing, historical demand of the last Codelco’s administrations can become a reality in the coming months.
Right now, and through the study of the proposed capitalization and investments by Codelco, which conducts by Treasury-the government is working on a plan that goes in that line.
This was stated yesterday by the Minister of Mining, Aurora Williams, who acknowledged that this is one of the options being discussed today within the government and that, personally, seems positive to her. However, the portfolio that has the last word is Treasury.
The Secretary of State said that in the context of the conversations she has with the team led by Alberto Arenas Minister raised this idea, and is one that is on the table now. However, there is still no final decision, as this is expected to happen before next June 30, deadline to have the Executive to decide.
“For any business, and even more so for mining, it is important to know ahead of the budget that is going to count,” said the Minister of Mining. Codelco maintains an investment plan of close to $ 5,000 million this year, the mining company has not released an official projection, which shall initiate the final Chuquicamata underground construction, which will cost U.S. $ 4.200 million. In addition, we must continue with the works of Nuevo Nivel El Teniente Mine and the final details of Ministro Hales, is already operational.
As acknowledged by the CEO of the corporation, Thomas Keller, the amount of investments this year will depend on the capitalization that is assigned.
Last year, Codelco received $ 1,000 million from the Treasury, but it came to financial resources and not fresh. Given the situation, the copper company management decided to reduce its investment, which fell by about $ 1,000 million compared to the official plan. Codelco maintains a positive note to keep borrowing risk, but if it get to be in the obligation to finance its investment plan entirely with debt, could jeopardize their classification, making access to credit, either through bonds or through banks.
Urgent resources
The Minister Williams is not the first authority raises the urgency of defining promptly commitment to capitalizing Codelco.
The diagnosis has been made within the executive is that the company cannot mortgage its investment plan, estimated situation occurred during the administration of former President Sebastián Piñera. Even the Secretary of Treasury, Alejandro Micco, a few weeks ago opened the alternative of using sovereign wealth funds to capitalize Codelco. “This government believes in a strong Codelco, which requires more investment (…)”.
We could do with our sovereign funds, “said Subsecretary of Treasury days ago. Despite the criticisms raised against the government of Piñera by low capitalization during the previous administration, in the Alliance there are also voices that insist on the urgency of capitalizing the State Company through a permanent formula, at least while it is investing in the structural projects.
“I find it necessary to pass the bill that aims to establish a multi-annual budget for Codelco, so those who administer this company did not have to negotiate every year the resources to move forward with the project,” said member Senator of the commission of Mining and Energy of the Upper House, Baldo Prokurica.
Source: Pulso
