London 14/01/2016 - Codelco will maintain copper output at the current level of 1.8 million tonnes per year despite the bearish market depressing commodity prices, it said.
To tackle dwindling revenues, CEO Nelson Pizarro unveiled today in a press conference in Santiago his plans to trim $1.1 billion in costs in 2016. The Chilean state owned mining company's budget for the New Year is $7.5 billion.
"To do more with less is the motto", Pizarro said. The executive stressed the importance of recovering competitiveness, while ruling out layoffs. Codelco, which has 19,000 workers in Chile, is one of the country's main employers.
The company is aiming to lower cash costs to $1.255 per pound this year from $1.386 per pound last year.
The miner intends to achieve its spending cuts goals saving up to $227 million in administration.
The company faces difficulties in raising productivity in mines that have been exploited for over a century, Pizarro said.
"This is not the NASA. We need to upgrade our technological capabilities but the mines are old," he added.
China's economic slowdown heavily affects Codelco. Up to 59 percent of the company's exports go to Asia, while 15 percent head to Europe.
While Pizarro described the end of the so-called commodities super-cycle as "aggressive", he is confident that prices will resume their upward trend over the long run.
Copper for delivery in three months on the LME was last at $4,394 per tonne, having hit a fresh six-and-a-half-year low earlier in the day at $4,330.
(Editing by Mark Shaw)