Chile's Codelco, China's Minmetals eye JVs, Jan visit

Chilean state copper giant Codelco is evaluating joint venture exploration prospects with Minmetals, the massive metals trader for No. 1 copper consumer China, Chile Mine Minister Santiago Gonzalez said on Tuesday.

"This is a great opportunity for us as a country because if we are able to capitalize on Chinese investments in Chile, we will take a big step toward strengthening mining investment," Gonzalez said.

He said a Chinese delegation led by the country's deputy mining minister would arrive in Chile in January in search of business prospects.

"There are certain prospects that are being evaluated at this time," Gonzalez told reporters in the Chilean capital, Santiago.

Production at Chile's Codelco, the world's largest copper producer, has declined in recent years as ore grades fell at aging mines.

The company is investing heavily in expansions at existing mines, but in recent years has inaugurated only one new mine, the Gaby pit in northern Chile.

China recently relinquished its right to buy a large stake in Gaby, with capacity to produce 150,000 tonnes of copper per year, amid protests from Codelco unions, but the market expects a compensation deal for Minmetals.

China, which consumes about 25 percent of the world's copper, is eager to get its hands on direct sources of the metal to guarantee supplies for massive infrastructure development.

Copper prices have more than halved since a peak in July 2008, as global economic turbulence grew and demand for the red metal crashed.

Codelco is expecting to see profits tumble from record highs in recent years, and Gonzalez said the company must capitalize on falling costs of materials used in mining.

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