16/12/08

Chile`s state-owned copper company Codelco called on all its providers and contractors to work together to increase productivity and reduce costs in the face of rapidly declining copper prices and production.

“We want to focus on perfecting our work relationships, and revise and extend contracts,” Codelco shared corporate services VP Juan Medel said in a speech at a Santiago conference Monday to discuss relationships with providers and contractors.

“We are willing to modify contracts with negotiations on both sides in order to prevent and anticipate any type of specific situations that may arise,” Medel said.

Codelco has 7,272 outstanding contracts for goods and services worth some US$15bn with a total of 3,919 companies. Of that amount, 4,090 contracts worth US$2.2bn are for goods and 3,182 contracts worth US$12.9bn, the company said.

Last year and in the early part of this year Codelco faced waves of violent protests by workers of its provider companies, who demanded bonuses directly from Codelco to reflect high copper prices on spot markets at the time.

The company has initiated a revision of all its contracts with providers, Medel said, adding that so far Codelco has met with roughly 30 companies and reduced provider costs by 8-10% in some cases.

The miner produced 1.12Mt of copper in this year`s first nine months, down 7.83% year-on-year.Maximiliano PichonBusiness News Americas

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