LME WEEK 2018 - INTERVIEW: Codelco chairman sees success in proposal to taper 10% law

A requirement that the world’s largest copper producer hands over 10% of its sales to the Chilean military has a strong chance of being phased out, the chairman of Codelco said.

Juan Benavides, who replaced Oscar Landerretche as chairman of the copper producer in May, told Fastmarkets MB that a proposal is currently being discussed in Chile’s Congress that would see payments from Codelco taper over seven to eight years until they are eventually eliminated. “It creates a distortion in terms of the net profits of the company,” Benavides said, noting that when copper prices enter cyclical lows, the company has to get into debt to fund the 10%. Chilean President Sebastián Piñera attempted to scrap the military funding in his first term, but the bill remains in Congress. “The discussions we’ve seen so far suggest it is now going to be approved,” Benavides said. But privatizing Codelco or having an international listing is unlikely, he noted. “I do not see internationalizing Codelco as being possible today. It is a state company, protected by the constitution, and I don’t see changes...

Published

Andrea Hotter

October 11, 2018

12:32 GMT

London