Codelco has responded to weak copper prices by trimming its workforce by more than 4,000 workers, Mining.com reported.
The massive workforce reduction for the Chile-owned company came a week after Chile’s Finance Ministry announced that it would give the miner $600 million in funds to help it achieve a five-year spending plan.
According to Mining.com, Codelco’s chief executive Nelson Pizarro said the cuts were “painful, but necessary” and the move has not affected production.
Local newspaper El Mercurio reports (in Spanish) that Pizarro said that not only did the cuts not affect production, but, “what’s more, the company’s output has grown 5.5 percent during the last year, and costs have dropped by about 11 percent.”
The $600 capital injection from the Finance Ministry, which will come from government bond sales, was announced after Pizarro presented an updated investment plan that reduced to $21 billion or $22 billion an original proposal of $25 billion, which aims to avoid a slump in output as existing deposits run out of profitable ore.
Codelco is not the only copper player taking drastic measures. Plunging prices have forced other top producers to consider cutting production, delaying new projects and slashing jobs to save money and mitigate oversupply.
In August, Freeport-McMoRan , the world's largest publicly traded copper miner, said it would slash its mining employees and contractors by 10 percent. It also said it would suspend operations at a mine named Miami in Arizona and decrease output at both its Tyrone mine in New Mexico and its majority-owned El Abra mine in Chile.
Mining and commodities giant Glencore followed in September, unveiling a $10 billion package of debt-reduction measures, which included issuing up to $2.5 billion of new shares, cutting dividends, selling assets and looking to offload a stake in its agricultural business to a third party.
Glencore also decided to suspend production at its copper mines in the Democratic Republic of Congo and Zambia, in a move that it says will take 400,000 tonnes out of the market and potentially provide a boost to prices.