Codelco CEO Octavio Araneda
SANTIAGO – Chile’s biggest civil unrest in a generation is heaping the pressure on new Codelco boss Octavio Araneda to squeeze more money out of aging copper deposits.
Before the wave of protests and riots began six weeks ago, Araneda was already facing the difficult task of having to invest billions just to keep production from plunging and costs rising at a time of thin margins in the global copper business.
Now, as the government faces a long list of spending demands to appease protesters, the challenge is more daunting: Codelco will be leaned on to help fund a bigger welfare system and can expect a much more tightfisted response from the state to its spending needs.
“We are in a crucial moment in our history,” Araneda told reporters in Santiago Friday. “Our obligation is to transform ourselves in order to continue contributing to the progress of Chile for at least 50 years more.”
On the spending side, he’s looking to shrink the company’s project budget through 2028 by $8-billion or 20%. He’s also looking to churn out $1-billion more a year in gross earnings from 2021.
While a capital injection would be welcome, Codelco is making a “great effort” to help generate the cash Chile needs to address social demands, Araneda said. That means keeping a lid on costs, boosting margins and “permanently revising” project designs.