“Today more than ever Codelco and our beloved country need the commitment with which the copper workers have historically acted”, says Codelco’s Executive President earlier this week. Without a doubt, the commitment of the workers is essential. However, in this context of a global pandemic, this call will not be enough.

With a copper price that fell from US $ 2.10 a pound this week, and with C1 direct costs of US $ 1.44 and net to cathode C3 of US $ 1.95 (observed during the third quarter of 2019), margins are narrowing, especially in some divisions with substantially higher costs. This situation directly impacts the cash flow of the company, which has been under a lot of pressure in recent years, not only to finance its operational expenses but also to meet the increasing capital costs of its project portfolio. What is happening was foreseeable: the state of Chile has been reluctant to reinvest its company’s profits and the system is beginning to creak. His gaze on Codelco (and let’s say it, of all Chile on its mining) is that of the milk cow. The long-term strategic perspective has been conspicuous by its absence, and today we are precisely beginning to see its pernicious consequences. Precisely, to finance its projects without much help from the owner – projects that otherwise only fulfill the objective of replacing production, it has been necessary for Codelco to go into debt at extraordinary levels for a company of its characteristics.

The company has the highest debt/Ebitda ratio in the global mining industry and only yesterday S&P warned of an impending downgrade of its rating. Besides, the situation impacts the fiscal coffers just at the moment when the State requires resources to alleviate the economic crisis caused by Covid-19.

And once again, one wonders if it is reasonable that the contribution that was foreseen in the previously called “Reserved Copper Law” continues to be in force, which still taxes Codelco with 10% of its gross sales to allocate resources to the Armed Forces. The saying, so often repeated these days that crises are opportunities, could once and for all be applied to repeal this tax on the company of all Chileans who, if they continue along this path, run the serious risk of not weighting to fulfill its obligations. And finally, when we know for sure that this crisis of the century is advancing without mercy, isn’t this an emergency serious enough to at least direct resources to our threatened health infrastructure?