July 29, 2020 / 6:15 PM / 12 days ago

Chile rules out privatization of state-owned mining giant Codelco

SANTIAGO, July 29 (Reuters) - The Chilean government ruled out on Wednesday the privatization of state-owned mining giant Codelco, the world’s largest copper producer, after a small group of lawmakers proposed to sell it off to raise funds for the coronavirus response.

An internal document attributed to the far-right Independent Democratic Union (UDI) party and leaked to Chilean media on Tuesday suggested selling it off among a series of measures to raise money for Chile´s dwindling coffers amid the pandemic.

“Faced with the statements of some deputies who suggested the privatization of Codelco, I want to say emphatically that it is not part of the government program of the President (Sebastián) Piñera,” said Minister of Mining Baldo Prokurica.

“Even in the extraordinary circumstances generated by the pandemic ... I totally rule out that there is an initiative in this matter,” Prokurica said in a statement.

The Federation of Copper Workers (FTC), which groups together unions of the world’s largest copper miner, also rejected the proposal on Tuesday, saying it would “bring Codelco to a halt before accepting any privatization attempt.”

Chileans have often debated the privatization of Codelco, but the company continues to turn over all of its profits to the state.

The UDI internal document highlighted that the company, nationalized in 1971 by the socialist president Salvador Allende, in 2014 had a market value of about $50.5 billion.

“Privatizing the company would generate a very relevant income for the state, which could be used for social benefits. Moreover, privatization could continue generating income for the state through the collection of taxes and royalties,” the document said.

The Chilean government has announced a series of social measures to support poor and working-class Chileans since the outbreak of the coronavirus in March, with a price tag worth around 12% of gross domestic product. (Reporting by Dave Sherwood Editing by Marguerita Choy)

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