CARTA DE CODELCO - PULSOs2.pulso.cl/wp-content/uploads/2012/05/1532041.pdf · Codelco (*) Freeport...
Transcript of CARTA DE CODELCO - PULSOs2.pulso.cl/wp-content/uploads/2012/05/1532041.pdf · Codelco (*) Freeport...
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Copyrights © 2010 by CODELCO-CHILE. All Rights Reserved.Copyrights © 2011 CODELCO-CHILE. Todos los Derechos Reservados. Copyrights © 2011 by CODELCO-CHILE. All Rights Reserved.
Codelco UpdateApril 2012
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Codelco´s Highlights
Development Plan Update & Outlook
Operating & Financial Review
Industry Overview
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• Strong operating & financial performance Year-End 2011 compared to 2010
- US$8.81 billion EBITDA 2011, 18.5% higher than 2010
- 40-year record in production during 2011, grew 2.0% compared to 2010,
• Important progress was made in structural projects: MH, El Teniente New Mine
Level, Chuqui Underground, RT Sulphides Phase II, and Andina Phase II
• Improvement in Safety: accident frequency rate in 2011 was 1.39, the lowest in
Codelco’s history, however the Company has to regret 4 fatal accidents
• Began initiatives in human resource and sustainability in order to ensure
excellence in all areas.
2011 Highlights
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World Leader in the Copper Industry
Long Life Copper Resources*
Copper Ore Grade Useful Life
Million of Tonnes % Years
Chuquicamata 16.3 0.65 46
RT 16.5 0.45 33
MH 7.9 0.83 41
Salvador 8.4 0.49 42
Andina 46.6 0.74 83
El Teniente 34.7 0.84 72
Gaby 2.0 0.36 12
Total Codelco 132.4 0.67 83* Mineral Resources include stocks of ore and broken material identified in Codelco´s BDP
-
500
1.000
1.500
2.000
2.500
Codelco (*) Freeport Xstrata BHP Billiton Chinese
Companies
Southern
Copper
Rio Tinto Anglo
American
Teck
Resources
First
Quantum
KGHM Norilsk Vale Antofagasta Barrick Gold
2011 2015 2021
Source: Codelco and Companies reports
(*): Includes 49% share in El Abra, considers preliminary BDP 2012 (**): Corriente Resources is a Joint Venture between Tongling and China Railways.
Past, Present and Future Leadership in Copper Production
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Smelted & Refined Copper 89%
2011 and 2010 Sales Breakdown by Region2011 and 2010 Sales Breakdown by Product
2011 Copper Sales Breakdown (mft)
US$ millions 2011 2010 %
Copper 15,684 14,715 6.6%
Molybdenum 778 720 8.1%
Other Products
(anodic slimes,
sulfuric acid,
etc..)
1,054 631 66.9%
Total 17,515 16.066 9.0%
2011 Top Clients (mft)
Nexans Copper France France
Southwire Company USA
Codelco Kupferhandel Germany
Cobre Cerrillos S.A. Chile
Wanxiang Resources Co. China
Aurubis AG Germany
LS Cable Ltd. South Korea
Ningbo Sunhu Chemical Prod. Co. China
Maike Metals Int. Ltd China
- Cathodes 82%
- Fire refined 4%
Concentrate 11%
Source: Codelco
- Blister 3%
Well Diversified, Fully Integrated and Stable Operations
41%
36%
17%
22%
20%
21%
9%
11%
11%
10%
2%
1%
0% 20% 40% 60% 80% 100%
2010
2011
China Asia (exc. China) Europe
North America South America Oceania
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Codelco´s Highlights
Industry Overview
Development Plan Update & Outlook
Operating & Financial Review
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0
100
200
300
400
500
19
08
19
11
19
14
19
17
19
20
19
23
19
26
19
29
19
32
19
35
19
38
19
41
19
44
19
47
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
20
10
World War I:
Military Demand
Post-World War II:
Golden Years in USA,
European Reconstruction &
Japanese Miracle
Oil Crisis
Substitution
Emergence of China,
India and Other
Developing Economies
Great Depression
Source: WBMS, IMF and Codelco.
*Year 2012 until February 29th. Constant Price in 2010 Currency
Structural Demand Changes and Constant Copper
Price, 1908-2012*
c/lb
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0
5.000
10.000
15.000
20.000
1950 1960 1970 1980 1990 2000 2010
China
Developing Countries
Developed Countries
‘000 tonnes
Solid Medium and Long-Term Market Fundamentals
Sources: WBMS, IMF, World Bank, United Nations and Codelco.
**PPP, 2005 US$.
World Refined Copper Consumption , 1950-2011 GDP and Consumption per Capita, 1980-2011
How Far Can China go?
China (‘79-2009*) Japan (‘60-’90) Korea ( 69-’96)
GDP Growth per Capita (%)
During 8.7 6.5 7.0
After 0.6 3.2
GDP per Capita vs. USA (%)
Initial 4.3 39.8 12.9
End 18.8* 92.4 52.3
Urbanization Rate (%)
Initial 19.36 43.09 54.20
End 46.96* 63.09 59.02
Population (millions)
End 1,300* 126 45Sources: Heston, Summers and Aten (2011), Penn World Table 7.0, May; UN Department of Economicand Social Affairs: World Urbanization Prospects: the 2009 revision
* For China “End", used the latest data available in 2009 PWT
-
10
20
30
40
0 15.000 30.000 45.000
JapanUSA
Taiwan
South Korea
Germany
China
Kg of copper per capita
PIB per capita*GDP per Capita**
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1,172
7,204
16,062
6,032
8,848
0
4000
8000
12000
16000
1995 1995-2010 Growth 2010 2010-2025 Growth 2025
What Matters is the Size...
Brook Hunt China Copper Consumption
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
CHINA 1960-2025
1970 - 1979
8% growth p.a.
1980 - 1989
5,9% growth p.a.
1990 - 1999
9,6% growth p.a.
2000 - 2009
14,7% growth p.a.
2010 - 2025
5,5% growth p.a.
1960 - 1969
3,5% growth p.a.
CHINA 1995-2025
Annual Average
Growth 95- 10
Source: Brook Hunt, December 2011
Annual Average
Growth 10- 255.5%
12.9%
Annual Average Growth
2010-2025: 5.5%
Total Growth 8,848 kt
=
Total Growth from
1960 to 2013 (53 years)
K tonnes
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Copper Supply Challenges
Industry’s Average Ore Grade
0,65%
0,70%
0,75%
0,80%
0,85%
0,90%
0,95%
1,00%
1985 1990 1995 2000 2005 2010 2015
Source: Codelco and Brook Hunt; * Primary Production
US$ / ‘000 tonnes, 2010 currency
Lumwana
Salobo I
Oyu TolgoiTenke Fugurume
CaseronesToromocho
Gaby
Andina Phase I
RT Sulphides I
MH
Los BroncesExp.
Konkola Deep
Quellaveco
Antamina
Collahuasi (total)
Los PelambresCerro Verde Mill
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
18.000
20.000
1995 2000 2005 2010 2015
Capex Cost Escalation
Supply Curve of the Industry*
Cash Cost Curve (C1)
Lower probability of discovering high grade/large size deposits
Many new mines will be U/G operations
Country risk: resource nationalism and sovereign risk
Infrastructure constraints
Environmental challenges
Capital costs escalation and tighter credit market
-20
0
20
40
60
80
100
120
140
160
180
200
220
240
260
280
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
2010
19852000
19951990
2005
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Consensus on Tight Market Balance
‘000 tonnes
CDEL INT BH CRU CDEL INT BH CRU
Refined Production 19.176 19.818 19.668 18.805 19.882 20.481 20.362 19.228
Change % 2,2% 2,5% 3,4% 0,1% 3,7% 3,3% 3,5% 2,2%
Refined Consumption 19.554 19.928 19.804 19.195 20.058 20.421 20.479 19.610
Change% 2,6% 3,4% 2,8% 3,5% 2,6% 2,5% 3,4% 2,2%
Balance -377 -110 -136 -390 -176 60 -117 -382
2011 2012
Sources: CDEL: Codelco, January 2012; INT; Intierra (ex Bloomsbury), Copper Briefing Service, March 2012 (published in February 2012); BH: Brook Hunt, Metals Market Service, Monthly
Update, January 2012; CRU: Copper Quarterly Industry and Market Outlook, January 2012;
‘000 tonnes ‘000 tonnes
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Positive Outlook for Copper Price, with Volatility
Price (c/lb, currency 2012)
2012 2013 2014 2015 2016
Intierra (ex Bloomsbury) 389 361
Brook Hunt 395 362
CRU 400 415 363 322 291
Analysts' Average 395 379 363 322 291
Barclays 404 496 400
Citigroup 355 377 354 337
Deutsche Bank 333 367 324 295 267
Macquarie 379 387 302 295 308
RBS 380 409 363 320 284
Banks' Average 370 407 336 329 286
Analysts and Banks Average 379 397 341 328 288
Cochilco Survey 385 390
Note of Publication Dates: Intierra (ex Bloomsbury), Copper Briefing Service, March 2012 (published in February 2012); Brook Hunt, Metals
Market Service, Monthly Update, January 2012; Copper Quarterly Industry and Market Outlook, January 2012; Banks, Energy and Metals
Consensus Forecast, January 2012. Cochilco: El Mercurio March 21st, 2012.
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Codelco´s Highlights
Industry Overview
Development Plan Update & Outlook
Operating & Financial Review
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Chuquicamata
Salvador
Gabriela Mistral
AndinaEl Teniente
Santiago
Calama
C
H
I
L
E
Antofagasta
2011 figures
Production (thousand tons)
Copper 423
Molybdenum 11
Cash Cost (c/lb) 110.8
Resources (mill mft) 63
2011 figures
Production (thousand tons)
Copper 118
Cash Cost (c/lb) 163.5
Resources (mill mft) 4
2011 figures
Production (thousand tons)
Copper 69
Molybdenum 1
Cash Cost (c/lb) 175.2
Resources (mill mft) 14
2011 figures
Production (thousand tons)
Copper 400
Molybdenum 6
Cash Cost (c/lb) 92.4
Resources (mill mft) 93
2011 figures
Production (thousand tons)
Copper 234
Molybdenum 3
Cash Cost (c/lb) 127.9
Resources (mill mft) 114
Radomiro Tomic
2011 figures
Production (thousand tons)
Copper 470
Molybdenum 2
Cash Cost (c/lb) 100.3
Resources (mill mft) 31
Ministro Hales
2011 figures
Starting Operation in
2013
Resources (mill mft) 13
High quality assets: Mine Operations
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8,451
4,968
3,948
5,799
7,033
0
75
150
225
300
375
450
0
1.500
3.000
4.500
6.000
7.500
9.000
2007 2008 2009 2010 2011
Codelco: 5 Year Results
Profit before taxes* and copper price
2011 Accident Frequency Rate**Direct Cash Cost (C1)
Production
** Includes own workers and contractors. Accidents with Lost Time / Million Working Hours
* Includes Export Tax Law
Note: Figures for 2009, 2010 and 2011 are under IFRS and 2006, 2007 and 2008 are under Chilean GAAP.
US$ Million c/lb’000 tonnes
1.665
1.548
1.7821.760
1.796
1.400
1.500
1.600
1.700
1.800
1.900
2007 2008 2009 2010 2011
39,7
70,2
92,9104,4
116,4
0
20
40
60
80
100
120
140
2007 2008 2009 2010 2011
3,5 3,4
2,4
2,0
1,4
0,0
1,0
2,0
3,0
4,0
2007 2008 2009 2010 2011
c/lb
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0
2.000
4.000
6.000
8.000
2010 2011
0
50
100
150
200
250Jan-Sep 2010 Jan-Sep 2011
Codelco’s 2011 Results in Perspective
US$ Million
Cost of SalesProduction
c/lb
Source: Companies’ Reports, Cochilco and Codelco **Codelco includes Export Tax Law. For Los Pelambres, Collahuasi and AAS figures are for Jan-Sep 2011 results, annualized
+37% +47%+16%
+13%
+55%
+17%
-37%
+6% -17%
-12%
0
400
800
1.200
1.600
2.000
2010 2011
Profit before taxes**
+3%
-25%
-10% +7%
-5%
’000 tonnes
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Codelco Costs January-December 2011
2011 2010
Total Costs & Expenses 205.6 197.6
Net Cathode Cost (C3) 171.6 171.7
Direct Cash Cost (C1) 116.4 104.4
Total Costs & Expenses increased ¢8 principally due to CPI effect and the
appreciation of the Chilean Peso against the US Dollar. In addition, prices of most
relevant materials and consumables increased significantly.
Net Cathode Cost (C3) was positive impacted by higher by-product credit
18
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And Good Results Continue on the Back of a High Copper Price and Record Production
IFRS
2009 2010 2011 2010/2009 2011/2010
Copper Production (thou. mft)(1)
1,782 1,760 1,796 (0.7)% 2.0%
Cash Cost (US¢/pound)(2)
92.9 104.4 116.4 12.4% 11.5%
LME Copper price (US¢/pound) 234.2 342.0 399.7 46.0% 16.9%
Total Sales $12,379 $16,066 $17,515 29.8% 9.0%
Gross Profit $4,713 $6,977 $7,232 48.0% 3.7%
Gross Margin 38.1% 43.4% 41.3% 13.9% (4.8)%
Adjusted EBITDA(3)
$5,369 $7,434 $8,813 38.5% 18.5%
Adjusted EBITDA Margin 43.4% 46.3% 50.3% 6.7% 8.6%
Net Interest Expense(4)
$291 $296 $250 1.7% (15.5)%
Capex $2,127 $2,616 $2,545 23.0% (2.7)%
Ratio of Debt to Adjusted EBITDA 0.9 0.9 0.8 - (11.1)%
Adjusted EBITDA Coverage Ratio(5)
18.4x 25.2x 35.3x 37.0% 40.1%
(US$ million)
1 Includes Codelco’s share of El Abra’s production
2 Cash cost is always relative to a metal and expressed per unit of production. It includes all cash expenses of production net of the revenues from other metals extracted that are not copper
3 Calculated as Net Profit plus Taxes (includes Export Tax), Finance Cost and Depreciations and Amortizations
4 Includes provisions and other financial expenses
5 Adjusted EBITDA coverage ratio is the ratio of Adjusted EBITDA to finance cost net of finance income
19
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133 133 134
688435 500 500
600
10001150
500 500
165
208
2012 2013 2014 2015 2016 2019 2020 2021 2025 2035 2036
Local bonds International bonds
100
Debt Profile (December, 2011)
Debt Maturities Schedule – US$ million
Bank Debt
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Industry Overview
Operating & Financial Review
Highlights
Development Plan Update & Outlook
21
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Codelco: Key Strategic Objectives
Secure the planned level of production during the coming years to take advantage of strong prices
Materialize the Key Structural Projects to develop Codelco’smining resources, maintain its leadership in world copper
production and maximize returns to the owner
Ensure medium and long-term competitiveness, introducing new technologies, rationalising its organization, promoting
generational change and improving the decision-making process
22
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Major Projects and Copper Production Forecast‘000 tonnes
ENMS
Depletion
Salvador
Oxides
Depletion
RT Oxides
Depletion
Chuqui Open
Pit Closure
Southern
Open Pit
MH
San
Antonio
Quetena
RT Phase II
EL TENIENTE
New Mine
Level
ANDINA
Phase II
CHUQUI
Uncerground
Source: Preliminary 2012 Business Development Plan
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Description
• New copper deposit near Chuquicamata (Calama).
• Important content of copper and silver.
• Open pit, concentrator and roaster.
Capacity• 50,000 tpd.
• 160,000 tonnes of copper / year*.
Investment • US$2.5 billion
Start-Up Date • 2013.
Status
• Engineering Progress: 82%
• Construction Progress: 11%
• Successful Pre-Stripping: 83 mn tonnes of material removed
Structural Projects as the Priority
MH
*: Average production during the first 10 years at design capacity. Information updated to March 23, 2012. Investment figures at December 2011. 2011 Decree Currency
MH División will be a new large-scale
operation of Codelco
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Description• Development of a new level of extraction at El Teniente, 300 meters below
the deepest level currently in production.
Capacity• 137,000 tpd.
• 415,000 tonnes of copper / year*.
Investment • US$3,1 billion
Start-Up Date • 2017.
Status
• Investment approved.
• Early works in construction
(Platform, access decline).
Structural Projects as the Priority
El Teniente New Mine Level
*: Average production during the first 10 years at design capacity. Investment figures at December 2011. 2011 Decree Currency
Ensure competitiveness and operational continuity in El
Teniente Division, incorporating new reserves (below current
operating level) in order to extend the life for over 50 years
25
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Description• Development of an underground mine at Chuquicamata.
• Production of copper and molybdenum.
Capacity• 140,000 tpd.
• 343,000 tonnes of copper / year*.
Investment • US$3,7 billion
Start-Up Date • 2018.
Status• In feasibility study stage.
• Early works ongoing
Structural Projects as the Priority
Chuquicamata Underground
*: Average production during the first 10 years at design capacity. Investment figures at December 2011. 2011 Decree Currency
The Chuquicamata open pit mine will transform
into a large underground mine
26
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Description• Increase of capacity from 60,000 tpd* to 200,000 tpd.
• Open pit.
Capacity** • 345,000 tonnes of copper / year**.
Investment • US$4,7 –US$5 billion
Start-Up Date • 2016.
Status • In feasibility study stage
RT Sulphides Phase II
*: Production currently sent to Chuquicamata. **: Average production during the first 10 years at design capacity. Preliminary investment figures at December 2011. 2011 Decree Currency
Structural Projects as the Priority
Exploit the great potential of sulphide
reserves at RT
27
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Description• Huge mineral resources with copper and molybdenum content.
• Open pit and underground operations.
Capacity• Capacity increase from 94,000 to 244,000 tpd.
• 306,400 tonnes of copper / year* (additional to current level of production).
Investment • US$6.4 billion
Start-Up Date • 2020.
Status • In feasibility engineering stage
Structural Projects as the Priority
Andina Phase II
*: Average production during the first 10 years at design capacity. Investment figures at December 2011. 2011 Decree Currency
Andina Division will expand its
capacity to take advantage of its
significant mineral resource base
28
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Codelco: An integrated Copper Mining Company with
the richest resource base and a lucrative portfolio of
opportunities
An integrated business model that generates stable and growing cash flows
A consistent well defined business plan based on abundant proven reserves and
a sustainable production to serve a large and growing market
A history of solid investment grade credit ratings with an absolute commitment to
maintaining them in time
Republic of Chile’s improving fundaments contribute to higher ratings
Incremental debt used to finance investment plan
Positive cash flow generation
Long term debt maturities designed to match cash flows
29
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This presentation has been prepared by Corporación Nacional del Cobre de Chile (“Codelco” or the “Company”) This presentation does not constitute
or form part of an offer or any solicitation to any other person or to the general public to subscribe for or otherwise acquire securities issued by Codelco
in any jurisdiction or an inducement to enter into investment activity, nor shall it (or any part of it) or the fact of its distribution or availability, form the
basis of, or be relied on in connection with, or act as any inducement to enter into, any contract or commitment or investment decision.
The information contained in this independently presentation has not been verified and is subject to change without notice. No representation or
warranty express or implied is made as to and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information
or the opinions contained herein. None of the Company, any of its respective affiliates, advisers or representatives shall have any liability whatsoever (in
negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the
presentation.
This presentation is only for persons having professional experience in matters relating to investments and must not be acted or relied on by people
who are not relevant persons.
This presentation includes „forward-looking statements‟. These statements may include words such as “anticipated”, “believe”, “intend”, “estimate”,
“expect”, “preliminary” and words of similar meaning. All statements other than statements of historical facts included in this presentation, including,
without limitation, those regarding the Company‟s financial position, business strategy, plans and objectives of management for future operations
(including development plans and objectives relating to the Company‟s products and services) are forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or
achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward looking
statements. Such forward-looking statements are based on numerous assumptions regarding the Company‟s present and future business strategies
and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation.
The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained
herein to reflect any change in the Company‟s expectations with regard thereto or any change in events, conditions or circumstances on which any such
statement is based.
As is standard in the industry, CODELCO divides its mineral holdings into two categories, reserves and resources. Resources are ore bodies of
economic value that have been identified and evaluated through exploration, reconnaissance and sampling. Reserves are the portion of the resource
that can be extracted based on an economic, environmental and technological analysis set forth in the mining plan. Reserves and resources are both
subdivided further, based on the degree of knowledge that CODELCO has of their extent and composition. The system used by CODELCO for
categorizing mineral ore is widely used within the mining industry (and codified in such international regulations as the Joint One Reserves Committee
(JORC) code of Australia, the South African Mineral Resources Committee (SAMREC), and the Reporting Code of Great Britain). Other systems of
categorization are also used; one such system is that used by the U.S. Geological Survey. This presentation may not be taken away with you. The
contents of this presentation may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in
part, for any purpose.
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