Brazil & Southern Cone - November 2015 (ISSN 1741-4431)

Codelco announces lay-offs: In late October Chile’s state-owned copper company Codelco announced the axing of 350 supervisors as part of cost-cutting efforts in response to the continuing slump in global copper prices. A 29 October press statement noted that the layoffs would allow for an 8% reduction in the supervisor payroll, generating a saving of US$48m a year.

On 26 October, Codelco announced a US$4bn reduction in its medium-term investment programme. Codelco’s CEO, Nelson Pizarro, stated: “We visualize an investment, taking into consideration the peso’s devaluation against the US dollar, of less than US$25bn. The exact value we could say would be between US$21bn and US$22bn”. At the time of writing, copper prices were trading at about US$2.24 per pound (/lb), down from US$3.05/lb a year earlier. News of the lay-offs came after Finance Minister Rodrigo Valdés told reporters on 28 October that the government would inject US$600m into Codelco to help finance the company’s business and development plan for 2014-2018. Valdés added that the funds would come from government bond sales. Under an October 2014 capitalization law, the government is authorized to inject up to US$3bn into Codelco.

Growth: According to the latest (5 November) report by Chile’s central bank (BCCh), the monthly economic activity index (Imacec), which incorporates around 91% of the goods and services included in the country’s GDP statistics, rose by 2.6% year-on-year in September 2015, with a rolling 12-month growth rate of 2.5%. Chile posted real annual GDP growth of 1.9% in 2014, on figures from the United Nations (UN) Economic Commission for Latin America & the Caribbean (Eclac). Eclac projects growth of 2.1% this year, improving marginally to 2.5% in 2016.

• Copper exports

On the latest figures from Chile’s copper commission (Cochilco), Codelco’s copper exports were valued at US$37.96bn in 2014, accounting for nearly half (49.5%) of the country’s total exports. This was down from US$39.73bn in 2013 (51.4% of total exports); US$41.78bn (53.4%) in 2012 and US$43.61bn in 2011 (53.6%). The same figures show that Codelco accounted for 1.8m tonnes (t) of the 5.7m t of fine copper produced in Chile in 2014 (down from 5.8m t in 2013).