Chile's Codelco will cut investment at its mines by as much as $4 billion, as it seeks additional funds from the government to steady its strained balance sheet.
CEO Nelson Pizarro said the state-owned mining company now planned to spend $21 billion-22 billion through 2018, down from $25 billion previously, as it reduces the size of a proposed expansion of its Andina division.
The recent appreciate of the dollar against the peso explains part of the drop, he said.
But a smaller expansion at Andina means that Codelco's production will not hit 2 million mt/year by 2025 as previously forecast, the executive added.
Last year, the company produced 1.84 million mt of copper.
The comments followed an extraordinary meeting between Codelco's board of directors and government ministers about the company's financial needs.
Earlier this year, the government approved a cash injection of $225 million, far less than the $800 million requested by the board. However, a sharp drop in copper prices since May has forced the authorities to revisit that decision.
Finance Minster Rodrigo Valdes said that the government would support the company in order to maintain its investment grade credit rating, so that it could borrow on international markets at competitive rates.
But the ministers have requested additional information on how sensitive its projects are to lower prices, before deciding on how much to capitalize the company.