RPT-NEWSMAKER-Nelson Pizarro: the 'scissorhands' looking to shape Chile's Codelco

Fri Aug 1, 2014 9:26am EDT

(Repeats July 31 item for additional readers with no changes to headline or text)

By Fabian Cambero

SANTIAGO, July 31 (Reuters) - Nicknamed 'scissorhands' for his agile management of difficult projects, Chilean industry veteran Nelson Pizarro is seen by Codelco's board as the ideal man to lead the world's top copper miner through a tricky yet pivotal phase.

Mining engineer Pizarro, named as the new chief executive officer of the state-run company by its board on Thursday, is also known for an ability to manage labor relations.

That could be a crucial skill on a likely rocky path ahead, which the company has previously said will require "sacrifices" from "all sides".

Codelco is facing a crucial juncture in its history. It needs to implement an ambitious investment plan to revive its aging mines at a time of falling copper prices and uncertain financing.

Former CEO Thomas Keller was ousted in June by the Codelco board, which itself had been recently reshuffled by President Michelle Bachelet. His tough stance on labor activism did not chime with the new center-left government's more inclusive approach.

But the short, soft-spoken Pizarro, 72, is viewed positively by Codelco's powerful unions thanks to his mining background, and he is widely respected in the local industry.

"The challenges of Codelco are so big and of such magnitude that probably for those conditions Nelson Pizarro is the right person at the moment," said Juan Carlos Guajardo, head of mining think tank CESCO.

CHUQUI TEST

The acid test for Pizarro will be the $4.2 billion transformation of the century-old Chuquicamata, known in the industry as "Chuqui."

Codelco wants to make the giant open pit project an underground mine, a costly and complex operation that will see about a third of the workforce laid off.

Pizarro has prior experience at Chuqui, which he managed in the 1990s. He also managed the company's Andina mine close to the capital, Santiago, which Codelco now wants to expand, a project opposed by environmental groups. He was later vice-president for the company's northern division.

His most recent role was the development of the new Caserones mine, owned by a Japanese-run venture, which was officially inaugurated on Wednesday.

Built more than 13,000 feet (4,000 metres) above sea level, with low ore grades and scarce water resources, its successful ramp-up cemented the image of Pizarro as someone who could solve knotty problems.

He is also relied on by FTSE100-listed Antofagasta Minerals , who named him to the board after operational problems at its Esperanza mine led it to a restructuring.

In addition to other challenges at Codelco, however, Pizarro will have to deal with the peculiarities that come with running a state-run company - his board will have the ear of the government, and much of Codelco's financing will rely on government largesse.

Antofagasta's current Chief Executive Officer Diego Hernandez, Keller's predecessor and also a respected industry veteran, left the Codelco post after two years following disagreements with the board. (Additional reporting by Anthony Esposito, Writing by Rosalba O'Brien; Editing by Mohammad Zargham)

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