Corporate profile

Codelco is one of the world’s top mining companies. It has the largest copper reserves in the world, it is at the forefront of knowledge and technology, and it has an organisation and a business model that promotes value creation. Its employees are competent and motivated to help build the company’s future; and its executives are highly skilled.

Corporación Nacional del Cobre de Chile, Codelco, is the world’s largest copper producer and one of the most profitable companies in the industry. It has US$ 20.279 billion in assets and at the end of 2010 its equity totalled US$ 4.531 billion. Its main commercial product is Grade A copper cathodes.

The Company has five mining divisions: Chuquicamata, Radomiro Tomic, Salvador, Andina and El Teniente. Since May 2005, Ventanas Smelter and Refinery Division is Codelco’s sixth division. As of May 2008, it incorporated Minera Gaby S.A., a 100% owned subsidiary. In 2010, it created Ministro Hales Division; its deposit is currently under construction. Codelco’s Head Office is in Santiago.

Codelco also has a 49% stake in the copper company Sociedad Contractual Minera El Abra, and it also has a stake in other mining ventures focused on geological exploration, both in Chile and overseas.

 

Leading Presence

In 2010, Codelco produced 1,760,000 metric tonnes of fine copper, including its stake in El Abra mine. This is equivalent to 11% of the 2010 global mine copper output.

Additionally, the Company is one of the world’s top producers of molybdenum; in 2010 it produced 21,677 metric tonnes.

Copper Reserves

Codelco has the largest reserves and resources known on the planet. At current production rates, mining operations have an estimated useful life of 70 years.

Stable and Diverse Customer Portfolio

Codelco has developed long-term relationships with a stable and geographically diverse customer base, including some of the world’s major manufacturing companies.

Research and Technological Innovation

Research and technological development, integrated into the production processes, are pillars that sustain Codelco’s competitive position.

From this perspective, innovation projects implemented by the company aim to significantly streamline the mining operation processes, causing a strong impact on efficiency, productivity, environmental care and protection, and also on worker safety. It also searches for new forms of mining, through technological breakthroughs.

Financial Strength

Access to capital markets, both domestic and international capital markets, easily and at competitive prices, significantly contributes to financing the Company’s funding programme, and, therefore, it is an integral part of Codelco’s long-term strategy.

A prudent funding policy, the good results obtained, the Company’s competitive advantages and the favourable market outlook are reflected in the investment grade credit rating that Codelco has maintained consistently over time.

Efficiency and Competitive Position

Codelco promotes initiatives and programmes at its mine operations in order to reduce production costs. During 2010, direct costs (C1) at Codelco were up to 104.4 cents per pound of copper. C1 is the type of cost used in the world mining industry to compare efficiency rates between different companies.

Vision

Codelco is the world’s largest copper producer and the company that contributes the most to the Chilean economy.

Creation and legal framework

Codelco is owned by the Chilean State and it encompasses mining, trading and industrial activities. Decree Law No. 1,350 (1976) created Corporación Nacional del Cobre de Chile, Codelco Chile, that took over the management of large-scale mines nationalised in 1971.

Codelco reports to the Government through the Ministry of Mining and is governed by ordinary legislation, except for specific provisions included in the abovementioned decree.

Through Law 20,392, published in the Official Gazette on 14 November 2009, the Basic Bylaws of Codelco Chile (D.L. 1,350, 1976) and current mining property regulations (Law 19.137) were amended. It came into force on 1 March 2010.

Trade Name

Corporación Nacional del Cobre de Chile. RUT (Fiscal ID Number): 61.704.000-K.

Management

Until 1 March 2010, date when Law 20,392 came into effect, Codelco’s executive and senior management was the responsibility of the Board and the CEO. Basically, the CEO was the managing authority and the Board was the governing and overseeing authority.

The Board consisted of the Minister of Mining, who presided it; the Minister of Finance; three members appointed by the former President of the Republic; and two members also appointed by the former President of the Republic, based on a proposal presented by Codelco’s workers’ and supervisors’ trade unions.

As of 1 March 2010, Codelco’s Corporate Governance changed; therefore the management is undertaken by a Board consisting of:

• Three members appointed by the President of the Republic;
• Two members who represent Codelco employees, appointed by the President of the Republic based on separate shortlists of candidates, for each position, on the one hand presented by the Copper Workers’ Federation and, on the other jointly presented by the Copper Workers’ Federation and the National Association of Copper Supervisors, and
• Four members appointed by the President of the Republic, based on a shortlist presented for each position by the Senior Public Management Council, with a favourable vote of four fifths of its members.

Codelco CEO is appointed by the Board who also delegate the powers required for his position. He is responsible for implementing the Board’s agreements and overseeing all the company’s productive, administrative and financial activities.

Budget

Codelco’s annual budget is approved by a Supreme Decree jointly issued by the Ministries of Mining and Finance.

Supervision

Codelco is overseen by Chile’s National Comptroller’s Office (Contraloría General de la República), through the Chilean Copper Commission.

The Company is registered with the Superintendency of Securities and Insurance (SVS), under No. 785. It is subject to the provisions under the Securities Market Law, and therefore has to submit to the SVS and the general public the same information that is required for all publicly traded companies.