Codelco May Seek Bank Loans for $600 Million to Finance Expansion of Mines
Codelco, the world’s largest copper producer, may seek bank loans to raise the $600 million it needs to finance expansions at its Chilean copper mines this year, Chief Executive Officer Diego Hernandez said.
The state-owned company is seeking government approval to retain some of its profit to help meet the financing needs, Hernandez said yesterday in an interview in Santiago. The government will announce its decision by June, he said.
“If not we have to go to the market,” Hernandez said. Codelco would probably seek to raise its financing needs in “bank loans and not bonds,” he said. The company prefers bond sales for raising larger sums of money, he said.
Codelco this week raised its forecast for investments in the next five years to $17.5 billion as it seeks to increase output at aging mines. The company plans to boost production to more than 2 million metric tons a year by 2020, from less than 1.8 million tons now, Hernandez said. Output will drop to 800,000 tons a year in that time without the investment, he said.
Codelco sold $1 billion of 10-year bonds in October for its expansions. The company will also use the $1.04 billion it obtained from selling its stake in Chilean power producer E.CL SA to meet its investment target for this year.
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