Codelco profits down, state wants tax advance
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Production fell 5.3% to 1.58 million tonnes in 2019 from 1.68Mt in 2018, while C1 cash costs increased 1.8% to $1.41 per pound from $1.39/lb in the prior year period. Codelco's C3 fully allocated cost fell 2.8% to $2.24/lb from $2.30/lb.
Codelco said operations in the second semester overcame many of the difficulties the company experienced in the first semester. Production increased 24% to 878,000t in the second half year while C1 costs fell 1% and C3 costs fell 19%.
Artemis all set thanks to unique approach
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With the government seeking funds to finance measures to prevent the spread of the COVID-19 virus, the finance ministry has asked Codelco to advance payments under the law 13,196, the Copper Reserve Law, under which the copper producer provides 10% of the value of export sales to the state.
The finance ministry is seeking $240 million, corresponding to the amount owing for December 2019, and January and February of 2020. The treasury has also moved to require Codelco to pay the tax monthly rather than yearly as it has in the past.
"Our operational continuity is key to maintaining our commitment to the country. We are aware that the resources generated by this company will be more relevant than ever to overcome this crisis," said Codelco executive president Octavio Araneda during the results presentation.
The Copper Reserve Law was implemented in October 1958 to provide a means to fund Chile's armed forces. It was repealed in 2019 and will be reduced and phased out through 2032.