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Codelco issues $950M in bonds to support expansion

Keywords: Tags  Codelco, Corporacion Nacional del Cobre de Chile, bonds, Ivan Arriagada, HSBC Securities, Merrill Lynch, Pierce, Fenner & Smith Mitsubish UFJ Securities

SÃO PAULO — Chilean copper producer Corporación Nacional del Cobre de Chile (Codelco) has issued 30-year bonds worth $950 million as it looks to raise capital for its investment plans.

"The obtained conditions are the result of the strong financial position that Codelco has and which places the company very well in the international financial markets," Iván Arriagada, Codelco’s vice president of administration and finance, said.

The operation attracted more than 150 investors from Asia, Europe and the Americas, the Santiago-based company said.

HSBC Securities (USA) Inc., Merrill Lynch, Pierce, Fenner & Smith Inc. and Mitsubishi UFJ Securities (USA) Inc. led the bond issuance.

The Chilean government in July approved a $1-billion earnings reinvestment for Codelco to support the miner’s investment plans.

The sum will mainly come from retained earnings generated from the sale of Codelco’s participation in Anglo Sur to Anglo American Plc, which amounted to more than $3 billion.

The investment for 2013 is pegged at $4.5 billion, while investments for 2012-16 will total about $27 billion.

The state-owned company’s main expansion projects are the 170,000-tonne-per-year Ministro Hales site, which is expected to start production at year-end; a new mining level at El Teniente; and the construction of an underground level at the Chuquicamata Mine.

Additional long-term objectives include expansion projects at the Radomiro Tomic and Andina mines.

Codelco aims to increase copper output to 2.5 million tonnes per year by 2021.

A version of this article was first published in AMM sister publication Metal Bulletin.

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