Chile's National Copper Company is the world's largest copper producer, operating seven mines and a smelter.
Figures released in March this year show that in 2020, Chile's national copper company achieved a pre-tax profit of $2.078 billion, an increase of 55% year-on-year, the company's refined copper production increased by 1.9% year-on-year to 1.618 million tons, direct production costs decreased by 8.6%, and sales of copper and its by-products increased. Chilean Finance Minister Zelda and Energy and Mines Minister Hovet both endorsed the state-owned company's operations.
Benavidez, chairman of the company, said last year's good operation was mainly due to the company's management improvements, followed by factors benefiting from higher copper prices and changes in exchange rates. Specifically, the establishment of rules in corporate governance has been strengthened and internal audit, control and supply systems have been improved.
Over the past decade, the company's competitiveness and influence have been declining, making it one of the least operationally efficient in the mining sector. Although it has the inherent advantage of high-quality copper resources, it has high operating costs, a single business and business model, a continuous decline in production, a profit margin far lower than that of the rising star of the copper industry, a shortage of funds, rising debt, and shelved investment plans, which have suffered many doubts in Chile.
Since 2018, the Chilean National Copper Company has developed a strategic plan, which will be implemented in 2019. The aim of the program is to help companies improve their productivity, profitability and sustainability, and the three main measures include: selecting good projects and implementing them in a timely manner, improving operational efficiency and focusing on mining resource development.
Octavio Alaneda, the company's general manager since 2019, said that this year's specific plans include maintaining and increasing production, increasing productivity, ensuring supply and doing a good job in project execution.
Araneda stressed that innovation is the key to increasing productivity and reducing costs. He said the company created a division dedicated to automation and technology in 2019, focusing on the application of artificial intelligence and machine learning, with the aim of improving the operation of processing plants and increasing copper production efficiency through better metallurgical processes and optimizing water use.
Talking about the changes in copper prices and the impact on businesses, Alaneda said that copper prices fell to $2.29 per pound in April 2020 and rose above $4 this year. Copper prices have always been characterized by high volatility, and rising prices are important for copper-producing countries, especially Chile, but cyclical changes in copper prices directly pose challenges to operational and investment decisions.
Author: □ Yinnan Zhang Xiaoran
Source: Economic Reference