• 6 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes Saudis Pull Hyperloop Funding As Branson Temporarily Cuts Ties With The Kingdom
  • 12 mins WTI @ $75.75, headed for $64 - 67
  • 5 hours Saudi-Kuwaiti Talks on Shared Oil Stall Over Chevron
  • 6 mins The Dirt on Clean Electric Cars
  • 9 hours OPEC's No. 2 Producer Wants to Know How Buyers Use Its Oil
  • 3 hours Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 11 hours Iranian Sanctions - What Are The Facts?
  • 5 hours UN Report Suggests USD $240 Per Gallon Gasoline Tax to Fight Global Warming
  • 6 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 4 hours EU to Splash Billions on Battery Factories
  • 2 hours COLORADO FOCUS: Stocks to Watch Prior to Midterms
  • 12 hours U.S. - Saudi Arabia: President Trump Says Saudi Arabia's King Wouldn't Survive "Two Weeks" Without U.S. Backing
  • 12 hours Superhumans
  • 1 hour Nopec Sherman act legislation
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

Controversy At The World's Largest Copper Miner

They may be out of the World Cup. But when it comes to copper, Chile is still the center of the universe.

Especially state-run producer Codelco, the world's largest miner of the red metal.

But numbers this week show there are potential problems brewing for this mining giant. With significant implications for supply going forward.

The number in question is $200 million. That's the amount the Chilean finance ministry voted yesterday to give Codelco--as part of funds for the company to carry out its capital investment program for the coming year.

That figure may sound a little low for a firm with the massive project scale of Codelco. Other observers in the Chilean copper industry certainly thought so.

In fact, the company itself had asked the finance ministry to approve $1.2 billion in funding for this year. Even the nation's mining ministry had recommended $1 billion in funding--to be dedicated to new projects, and expansions and upgrades of aging mines.

But the finance ministry has the final say. Under Chilean law, Codelco is required to turn all of its profits over to the government. Who then have the ultimate decision on how much cash is returned to the company for capital investment.

It thus appears there is a serious disagreement among the players here. Either the company and the mining ministry are asking for more than is needed. Or the government is under-funding Codelco, in an attempt to save cash for its own purposes.

The move is especially interesting in light of recent changes in Codelco's management. Which saw the company's CEO Thomas Keller fired last month--after he disagreed with board members about corporate spending.

At the time, Keller noted he was "not prepared to make investments where Chileans will lose money." Suggesting he believes Codelco's current spending plans may not be in the best interests of continued profitability for the company.

An interesting situation is thus shaping up--where the world's largest copper supplier is increasingly being run based on government interests. This could end up being a major x-factor in supply over the coming years.

Here's to the right allocation,

By Dave Forest


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News