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Codelco to lose 13% of future copper output with new CapEx cuts

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Codelco to lose 13% of future copper output with new CapEx cuts

Chilean copper producer Codelcowill reduce CapEx by US$6 billion over the next five years as it copes with weakprices for the red metal, Reuters reported April 5.

The company previously planned to slash US$4 billion in spendingfrom its investment plan.

As a result, about 13% or 4 million tonnes of Codelco's plannedproduction of 44 million tonnes over the next 25 years would be lost, accordingto President and CEO Nelson Pizarro.

Such cuts would also lead to 70,000 fewer tonnes of refined copperfrom 2015 and 2019, increasing to 600,000 tonnes less in the next five years.

However, the executive sees the potential for a market deficitfrom 2018 as slowing Chinese demand would push miners to slash output, freeze operationsand reduce their workforce.

In March, Codelco reported a net loss of US$1.4 billion in 2015 as a result of drops incommodity prices and US$2.4 billion in asset impairments.