March 1 (Bloomberg) -- Codelco will maintain a record pace of investments to preserve its status as the world’s biggest copper producer while pledging debt-market prudence to retain its credit ratings and contain borrowing costs.
Chile’s state-owned miner will spend more than $5 billion this year, up from last year’s $4.2 billion as part of a plan to reach annual output of 2.25 million metric tons by 2021, Chief Executive Office Thomas Keller told reporters in Santiago.
Codelco plans to begin mining at its Hales project in October and will seek approval this year to expand the Andina mine in central Chile, Keller said today. The company is also beginning to tunnel underneath the century-old Chuquicamata mine to access new deposits as ore-grades decline.
While companies face “attractive” market conditions to raise money, Codelco will be “prudent” in selling bonds to prevent credit rating changes, Keller said. The Santiago-based company will use profit and tap bond markets to help finance this year’s capital expenditures, he said, without elaborating.
Codelco is rated A by Standard & Poor’s, making it the second-highest rated major mining company behind BHP Billiton Ltd.
As mining companies in Chile delay some of the more than $100 billion in planned investment amid electricity shortages, Codelco will rethink its proposed expansion at the Salvador mine. The current project doesn’t meet company profit criteria, Keller said.
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