Chilean copper producer reports sharp earnings drop
The world's largest copper producer reported Friday a more than 40 percent drop in earnings in 2008 due to rising costs, declining production and a sharp fall in the metal's price from record highs.
Chile's state-owned Codelco copper company said its earnings fell 41 percent to 4.968 billion dollars in 2008 from 8.451 billion in 2007 due to the steep drop in sales and prices.
Despite the downturn, Codelco president Jose Pablo Arrellano said the company had no plans to lay off workers and would invest two billion dollars in 2009.
Codelco produced 1.46 million tons of copper in 2008, down from 1.58 million the year before due mainly to a decline in the yield from its five mines, it said.
"The Codelco deposits are old," Arellano said. "So the same effort, the same work, produces less."
He said a hard winter in some mining areas and labor unrest had also contributed to the drop in production.
Copper prices peaked in July at 4.07 dollars a pound, only to go into a tailspin. Copper prices closed last week at 1.42 dollars a pound on the London Metal Exchange.
Chile has accumulated 22 billion dollars in foreign reserves thanks to high copper prices in recent years.