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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (44700)	10/7/2009 10:23:44 PM
From: LoneClone	Read Replies (1) \| Respond to of 197060

Chilean congress agrees to give Codelco $1bn The investment is designed to help lift the miner's stagnant output Author: Alonso Soto and Antonio de la Jara (Reuters) Posted: Wednesday , 07 Oct 2009 SANTIAGO (Reuters) - mineweb.co.za Chile's Congress on Tuesday approved a bill that unlocks $1 billion in government financing to state miner Codelco, the world's top copper producer, to boost its investment in a year marked by price volatility. The fresh financing will likely delay any plans to issue debt this year and help the state miner speed-up projects to lift its dwindling output as copper prices recover. The bill, which was linked to a government $4 billion stimulus plan launched in January to battle the global crisis, overhauls Codelco's corporate governance in an effort to improve the efficiency of Chile's largest state company. The $1 billion should be disbursed over a year, the bill reads. "This will not solve all of Codelco's problems, but it's a crucial opportunity," said Juan Carlos Guajarado, head of Chile's copper industry think tank CESCO. "It's a good chance for Codelco to turn more competitive and play as an equal with other big companies in the mining landscape." The law languished for months in Congress, prompting Codelco executives to ponder a debt sale to finance investments in 2009, company sources said. In June, Codelco registered a local debt shelf for around $400 million worth of bonds. The company, which plans to invest $2 billion this year, already sold $600 million worth of 10-year notes in January when copper prices tanked after reaching record highs in 2008. The bill aims to give Codelco the agility to work as a private company, cutting through red tape and providing better access to financing. However, some analysts say the governance overhaul fails to address Codelco's most pressing issue: financial independence. The giant miner is the cash-machine of the Chilean government, funding a big chunk of its social programs. Codelco's investments are decided based on the government needs instead of a long-term corporate plan, critics say. Codelco has lost ground against private companies and seen its output stagnate since 2004 due to aging mines and lower ore grades. The company produced 1.54 million tonnes of copper in 2008. (Editing by Christian Wiessner)