- Changing capital structure would require constitutional change
- For now, the company is focused on investments in Chile
Chile will have to discuss “at some point” the possibility of taking its state-owned copper miner public to finance future international expansions, the company’s chairman said.
“If you invest abroad, you are not going to do it with money from the state,” Codelco Chairman Oscar Landerretche said in an interview Wednesday with Santiago radio station Infinita. “At some point, we’ll have to face up to the idea of opening up a piece of Codelco on the exchange.”
Allowing investors to buy shares in Codelco is a politically-charged topic in Chile, where mining accounts for more than half of exports. In 2009, then presidential hopeful Sebastian Pinera proposed selling a 20 percent stake before dropping the idea as elections approached.
Even with copper prices down more than 50 percent from a 2011 peak, Codelco is engaged in a record investment program to replenish aging reserves. That includes building an underground mine at Chuquicamata, the century-old open pit expropriated by President Salvador Allende from U.S. mining companies Anaconda Corp. and Kennecott Corp. in 1971.
Pinochet, the military dictator who overthrew Allende in 1973, didn’t return the mines to their owners and created Codelco in 1976. The democratically elected governments since have used Codelco profits to help make Chile the wealthiest country in the region and the highest-rated, with an AA- ranking from Standard & Poor’s and Aa3 by Moody’s.
An initial public offering would require a constitutional change and the approval of congress.
While Codelco eventually wants to use its copper-mining expertise outside of Chile, for now it’s focused on domestic operations and investments at a time of low metal prices, Landerretche said.