June 6, 2014 / 11:45 AM / 4 years ago

UPDATE 4-Chile's state-run Codelco removes CEO Keller

* Keller, board had differences of vision and style

* Move follows change in Chile government, Codelco board

* Interim CEO to be named on June 13 (Adds political context, comment, Codelco statement)

By Alexandra Ulmer

SANTIAGO, June 6 (Reuters) - Chilean state-run copper miner Codelco said it was removing Chief Executive Officer Thomas Keller to seek new leadership at a pivotal time for the company, with observers seeing a shift in style likely rather than major business changes.

Keller, a former retail executive, earned plaudits for his efforts to overhaul old mines and cut costs at the world’s No. 1 copper producer, but his tough stance toward labor activism triggered tensions with Codelco’s powerful unions and the country’s new center-left government.

The board, recently reshuffled by President Michelle Bachelet, voted 5-3, with one abstention, to remove Keller, who was named CEO in 2012 during the conservative administration of Sebastian Pinera.

“We asked Thomas Keller to tender his resignation as CEO as a result of the company’s move towards a new phase with new challenges that require new leadership,” board head Oscar Landerretche told journalists after a more than five-hour meeting that ended Friday morning.

Keller will remain in place until June 13, when an interim CEO will be named, Codelco said in a statement, adding that it would form a committee to select a replacement.

Although the board stressed that Keller’s removal was not politically motivated, Codelco’s CEO has traditionally changed in tandem with new governments.

Keller’s replacement is likely to have an approach that is closer to the more inclusive, union-friendly stance of Bachelet, whose term began in March.

However, the fundamentals of Codelco’s massive $30 billion investment plan will almost certainly remain intact, experts said. The new CEO’s challenges include a financing shortfall, tired mines with falling ore grades, and a sliding copper price .

“I don’t see a change of direction,” said Gustavo Lagos, mining professor at the Universidad Catolica. “It won’t become politicized. ... Whoever takes over will have exactly the same challenges.”


There is no obvious candidate to become CEO. Local media and industry analysts have floated the names of Nelson Pizarro, a respected industry veteran on Antofagasta’s board who also runs the new Caserones mine project; former Codelco executive Sergio Jarpa, who has good relations with mining unions; and current Codelco executive Juan Medel.

Codelco hopes to name a CEO within months and will probably accept applications, said Landerretche, an economist and key architect of Bachelet’s tax reform plan.

Keller, who had said he had different views from the board on how to run the company, ruffled some feathers with a sometimes brash personal style.

At the heart of the policy clash is how to navigate massive overhauls of Codelco’s old mines, especially century-old Chuquicamata, since the changes include laying off workers and curtailing their benefits.

Some in the industry say the success of Codelco’s ambitious investment plan hinges on fostering harmonious relations with unions, while others say a bloated workforce is a hindrance.

Differences with the board were also the reason behind the resignation of Keller’s predecessor, Diego Hernandez, who is now the CEO of Antofagasta Minerals. (Additional reporting by Rosalba O‘Brien; Editing by Lisa Von Ahn and Leslie Adler)

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