Santiago, 27 March 2015. Codelco increased copper production at its operations by 3.1% and reduced costs by US$ 209 million in 2014, partially offsetting the negative impact of lower copper prices, delivering a pre-tax profit of US$ 3.033 billion.

Increased Copper and Molybdenum Production

In 2014 Codelco's output totalled 1,841,000 tonnes of refined copper, including its interest in El Abra and Anglo American Sur. The copper produced by its divisions rose 3.1%, mainly because Ministro Hales Division ramped-up operations.

During this period, by-product output also increased. Molybdenum production rose 33%; silver 119%; gold 14% and sulphuric acid 8%.

Significant Cost Reduction

The Company has systematically reduced its costs and expenses, achieving the US$ 600 million target set in its Cost Reduction Plan during 2013-2014.

In 2014, Codelco's direct cost (C1) fell 7.8%, from 163.14 c/lb of copper in 2013 to 150.4 c/lb en 2014.

US$ 3.033 Billion in Pre-tax Profit

Although copper production rose 3.1% and costs fell to US$ 209 million, due to lower copper prices, Codelco's pre-tax profit was US$ 856 million less than in 2013, totalling US$ 3.033 billion.

In 2014, lower copper prices reached an average 311.3 c/lb, down 6% from 2013, i.e., a US$1.065 billion fall. This was partially offset by saving US$ 209 million in costs and expenses and a positive exchange rate.

The price for molybdenum, Codelco's key by-product, was US$ 25.1 per kilogramme in 2014, up US$ 2.4 from the average price in 2013 (US$ 22.7). Prices also fell for gold (-10%), silver (-20%) and sulphuric acid (-20%).

Capitalisation Law and Investment Plan

In 2014 the Codelco Capitalisation Law was passed for up to US$4 billion, enabling the implementation of a US$ 25 billion investment plan for a five-year period. Likewise, the Board approved a US$ 3.306 billion investment to implement the Chuquicamata Underground Mine Project, the highest allocation in company history

Strong Environmental Investment and Dialogue with Employees

Codelco invested US$ 205 million on environmental initiatives in 2014, and will continue to do so over the next few years. The company also reported that despite no serious environmental incidents, it is focused on improving its current operating standards, before the emission standards enter into force.

In 2014, significance progress was made in labour relations; dialogue was established with employees to address Codelco's challenges. In this good working environment, there were 7 collective bargaining agreements, and 5 were carried out in advance. All reached an agreement and there were no conflicts.

Improved Corporate Governance and Transparency

In 2014 Codelco incorporated world-class standards in transparency, probity and rendering of accounts. Codelco also reported that the Board is assessing new reforms to regulate inside lobbying activities, to strengthen and reform internal audit, and implement rules to prevent conflicts of interest.

Communications Division