Codelco Copper Output `Guaranteed' at Current Levels, CEO Hernandez Says

Codelco, the world’s largest copper producer, is “guaranteed” to produce at current levels for the next three years, incoming Chief Executive Officer Diego Hernandez said.

Codelco will spend $15 billion this decade to develop the company’s reserves, the world’s largest, Hernandez, the former head of BHP Billiton Ltd.’s base metals division, said in his signing-in ceremony today.

Codelco faces a “tremendous challenge” to revert sagging output at its aging mines, some of which are a century old, Hernandez said. Codelco’s copper production has fallen in four of the past five years.

“There are significant challenges but if we know how to handle them we have a bright future,” Hernandez said. “Fortunately Codelco has enormous reserves in its current operations.”

Codelco needs to explore for deposits in areas outside of its existing operations, Hernandez said.

To contact the reporters on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net; Matt Craze in Santiago at mcraze@bloomberg.net

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